'This is a moment for Britain to be proud of' Government will finally pay off WWI debt
MORE THAN 100 years after the first drop of blood was shed, the British government has announced it will finally repay its financial debt for the First World War.
Chancellor George Osborne announced he will redeem £1.9billion from an outstanding bond next March, saying it was "a moment for Britain to be proud of."
This comes after Mr Osborne announced he planned to pay off a smaller bond of £218m from a 4 per cent consolidated loan - issued by Winston Churchill, as chancellor, in 1927, in October.
However today the Chancellor went one step further in his last statement before the general election, as the Government looks to remove all other undated gilts in its portfolio - some of which have origins going back to the 18th century.
During his Autumn Statement, the Chancellor said: "This is a moment for Britain to be proud of. We can, at last, pay off the debts Britain incurred to fight the First World War.
"It is a sign of our fiscal credibility and it's a good deal for this generation of taxpayers. It's also another fitting way to remember that extraordinary sacrifice of the past."
This is a moment for Britain to be proud of. We can, at last, pay off the debts Britain incurred to fight the First World War
The move is the first planned repayment of an undated gilt of this kind by government for 67 years.
The 3.5 per cent War Loan is the most widely held of any UK Government bond with more than 120,000 holders, or 60 per cent of all holdings of government gilts.
About 97,000 of these investors hold less than £1,000 and almost 38,000 holders own less than £100, the Treasury said.
The bond was issued in 1932 by the then-chancellor Neville Chamberlain in exchange for the 5 per cent War Loan between 1929 and 1947, which was issued in 1917 as part of the effort to raise money to pay for the First World War.
The Debt Management Office estimates that Britain has paid some £5.5 billion in total interest on the 5 per cent and 3.5 per cent war loans since 1917.
Current low interest rates mean the Government will be able to refinance the debt with new bonds.
The Treasury will redeem the outstanding £1.9 billion of debt, which pays 3.5 per cent interest, on March 9.
The Government is also looking to remove all six of the other remaining undated gilts in its portfolio, including some debt originally issued in the era of the South Sea Bubble in the 18th century.
The Great War broke out in july 1914 and continued until Novemebr 1918. It was one of the deadliest conflicts in history and more than 9 million combatants and 7 million civilians died as a result of the war.
