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<p>The Chancellor of the Exchequer, George Osborne, announced on 3 December that the
Government will redeem 3½% War Loan, thus repaying the vast majority of the nation’s
First World War debt. The Chancellor also announced that the Government will adopt
a strategy to remove the other remaining undated gilts in the government’s debt portfolio,
some of which have origins going back to the eighteenth century, where it is deemed
value for money to do so.</p><p> </p><p> </p><p> </p><p>This announcement followed
the Government’s decision on 31 October to redeem the much smaller 4% Consolidated
Loan, the first planned repayment of an undated gilt of this kind by government for
67 years. The Debt Management Office also announced on 17 December that 3½% Conversion
Loan would be redeemed on 1 April 2015. After these redemptions, none of the £2.2bn
worth of First World War debt currently in the government’s debt portfolio will remain.</p><p>
</p><p> </p><p> </p><p>The Treasury will redeem the outstanding £1.9 billion of debt
from 3½% War Loan on Monday 9 March 2015, and the 4% Consolidated Loan will be redeemed
on 1 February 2015.</p><p> </p><p> </p><p> </p><p>The repayments on this debt will
go to the holders of these bonds. The Treasury does not hold detailed information
on the identity of organisations or individuals who own gilts, however information
on sectoral holdings of gilts is published on a quarterly basis by the Office for
National Statistics. The latest information on the breakdown of gilt holdings by sector,
including a breakdown of non-UK resident holders of gilts by foreign central banks
and other non-residents, is published by the ONS in Section 5.2.10 of its quarterly
United Kingdom Economic Accounts publication.</p><p> </p><p> </p><p> </p><p>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 relatively high rate of interest on these gilts means that most important
of all, this decision represents great value for money for the taxpayer.</p><p> </p><p>
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