Source: Fortune
Summary
Andy Burnham, Britain’s soon-to-be prime minister, is considering issuing war bonds to fund the country’s defense sector. The proposal, which was previously dismissed by outgoing Prime Minister Keir Starmer, would allow the public to buy government debt with the proceeds going directly to the military. The idea has gained support from the Liberal Democrats and senior executives in the City of London, who believe it could raise up to £20 billion. The bonds would be exempt from inheritance tax and would offer a lower interest rate than standard 10-year gilts.
Our Reading
The strategy enters a familiar phase.
Andy Burnham’s team is floating a new idea to fund the UK’s military budget. The proposal, backed by Liberal Democrats and City executives, could raise £20 billion. Burnham’s adviser, Andy Haldane, has previously supported the idea. The war bonds would be exempt from inheritance tax and offer a lower interest rate than standard gilts. The plan has sparked debate, with some arguing it’s a way to tap into the UK’s £2 trillion savings pot.
The numbers tell one story: £20 billion in potential funding, £13.5 billion in planned spending, and £10 billion in expected interest. But the real story is about the politics of defense spending and the search for creative ways to fund it.
Author: Evan Null
