Patriotism aside, Brits won't want to pay for another war

How will we pay for the next war? This is a question that deserves rather more serious attention than it currently receives.

- SEAN O'GRADY

And yet, at the moment, arguments over whether Winston Churchill should be replaced by a beaver, or possibly a hedgehog, on the fivepound note are much louder.

The furore epitomises our very British obsession with the Second World War, yet the great irony is that it could be distracting us from adequately preparing for the next one. Whatever else he achieved for the country, Churchill can't help us stand up to Putin, and neither can nostalgia.

Nonetheless, Ed Davey, the decidedly non-pacifist leader of the Liberal Democrats, has temporarily absented himself from the Churchill vs wildlife controversy to kick off a debate about how we might finance our military, given that it doesn't look like deescalation in the Middle East is coming any time soon.

His solution? The Treasury should issue "war bonds", which would allow citizens to lend money to the state to help cover the country's burgeoning defence costs. And, for obvious reasons, the defence industry is in favour - specially branded National Savings certificates could, in theory, raise millions, if not billions, from a patriotic public.

These Davey Bonds, as they won't be known, will run across a two-to-three-year period, and pay out the same interest as standard government bonds. The Liberal Democrats argue that the money raised would be hypothecated, ie ring-fenced, for defence and associated industrial investment, stimulating "growth, jobs and higher revenues... which would partially offset the cost of additional debt servicing".

Treasury sources indicate that they rule nothing out, but there seems to be no obvious enthusiasm for reviving a policy that was last administered with any success more than a century ago.