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Proposals to repay £2bn WWI debt

OWoN: For the Global RV hopers, see how Britain is leading the way paying off its WW I War debt. This puts pressure on the US to cough back its stolen PP money.

National War Bonds were first issued in 1917 to raise money to finance the ongoing cost of the First World War

Proposals to repay £2bn WWI debt

Mail Online
By Press Association
31 October 2014

Steps to repay the UK's £2 billion in outstanding First World War debt have been unveiled with plans to redeem bonds dating back to the 18th century.

National War Bonds were first issued in 1917 as part of an effort by the government to raise money to finance the continuing cost of the First World War, which started with the issue of the first war loan in November 1914.

As the UK has made estimated interest rate payments totalling £1.26 billion since then, the Treasury said today it is looking into the practicalities of repaying the outstanding debt of around £2 billion.

A first repayment of £218 million is due in February, which would represent the first settlement of an undated gilt in 67 years.

There are eight undated government bonds outstanding, including one issued by William Gladstone to consolidate among other things the capital stock of the South Sea Company, which had collapsed in the South Sea Bubble financial crisis of 1720.

In 1888, chancellor George Goschen converted bonds first issued in 1752 and subsequently used to finance the Napoleonic and Crimean wars.

The First World War bond, known as 4% Consols, was issued by then chancellor Winston Churchill in 1927 to refinance the National War Bonds from the First World War.

There are 11,200 registered holders of the bond, with 7,700 investors holding less than £1,000 and 92% of holders owning less than £10,000 each.

The Treasury said the moves would deliver value for money to taxpayers by refinancing the borrowing at lower rates than the 4% it is currently paying.

It added: "Around £2 billion of First World War debt remains, which is one graphic illustration of the legacy of this war on our nation and the long-term effects of high debt. The Government is looking into the practicalities and value for money of repaying this outstanding debt in full."


1 comment :

  1. Government to begin paying off WW1 debt, announces George Osborne

    THE Government will pay off part of Britain's World War One debt - the first such payment made by a Chancellor in 67 years, George Osborne announced today.

    The Tory politician revealed the Treasury will repay £218million of a £2billion sum owed from the 1914 to 1918 war on February 1 next year.

    The payment, which will be issued to the National War Bonds, comes as part of a redemption of bonds dating back to the eighteenth century.

    Chancellor George Osborne said: "I am delighted to be able to announce today that we will repay part of the country’s First World War debts.

    "We are only able to take this action today thanks to the difficult decisions that this government has taken to get a grip on the public finances.

    "The fact that we will no longer have to pay the high rate of interest on these gilts means that most important of all, today’s decision represents great value for money for the taxpayer.


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