Merryn Somerset Webb

I mean, I look at that and I think, well, I tell you how that could really work.

And it's been suggested by a few people.

It would really work if you said, you know what, we're going to unlock these new bonds specifically for defence.

And we don't normally hypothecate in the UK, but, you know, why not at this point?

If you made those defence guilts free of inheritance tax.

So on this, two things.

One, I think that is an avenue, but I wouldn't pursue it as an alternative option.

to doing something on spending.

I think the market's tolerance for this, the credibility of the UK's fiscal position, first needs buttressing.

And buttressing means this government demonstrating it has the ability

to make politically difficult choices around spending?

I think without that, any further borrowing risks a raspberry from the markets.

Subject to that, do I think there's something that could be separately labelled and separately marketed?

I think probably yes.

Would that require a tax sweetener, either inheritance or maybe even a temporary extension of the ISA allowance?

Yes.

I think, as you know, and as you've spoken about extensively, I think you're right to speak about it.

We have north of £2 trillion parked up in cash, earning negative real returns.

Bringing some of that into the equation in a sort of patriot bond, a war bond, I think that could be quite good marketing and quite good fiscal arithmetic.

So, yes, I think that ought to be an option on the table, but as a complement to rather than substitute for doing something on spending.