The Government has come under fire for failing to pay back the £1.9bn it owes to citizens who bought war bonds despite finally paying off its World War Two debt to the US last month.
The 3 per cent yielding war bonds were bought by UK citizens to help fund the First World War effort.
Over 70 years on, £1.9bn of these loans are still outstanding. Many people hit by sterling devaluations sold off their bonds at lower prices while others who bought the bonds passed them to descendants.
Anand Associates financial architect James Brook says in light of the US debt repayment the Government should set a date to pay back the money it owes its own citizens as he says the war bonds’ original terms and conditions stated they would be redeemed “when the situation returned to normal”.
The Government says previous administrations honoured this commitment by starting paying off the bonds in 1950 and never committed to buying back the bonds at a particular time. The Treasury says it is merely adopting the stance of previous Governments which raised concerns that paying off the outstanding amount would lead to windfall gains for people who bought the bonds at knockdown prices.
But Brook says the Government should be able to track down the original purchasers and their descendants.
He says: “Is this any way to treat the people who helped with the war effort? The Government says that investments with it are 100 per cent secure.”
A Treasury spokesman says: “The commitments made on the war gilt have been honoured by successive Governments in the same way as the commitments made on Second World War foreign currency debts have been honoured by successive Governments.”
Help the Aged head of public affairs Mervyn Kohler says: “It is very unlikely the Government will redeem these bonds when it can continue to borrow the money at a low rate.”