The National Bond: Issuing great British security bonds to fund defence while building national pride

For decades, economic policy has been limited by short-termism and top-down, lever-based policies which fail to drive national system-change. Demos now aims to build a ‘Citizen Economy’ – one which strengthens the public legitimacy needed for long-term decisions, and engages with questions of culture, social relationships, pride and place to unlock economic systems-change. The tax system is central to this diagnosis. A lack of public legitimacy has prevented successive governments from making the bold changes needed for a fairer, simpler, pro-growth tax system. 

The 2026 Budget provides an opportunity to turn the dial. While calls for a perfectly efficient tax system are important, we cannot overlook the political constraints. A perfectly efficient tax system requires building public legitimacy for bold reform. This Demos series, A Citizen Budget 2026, lays out how the government can build that legitimacy through pro-growth tax reforms. 

This paper proposes issuing ‘Great British Security Bonds’ to help fund defence while giving citizens a tangible stake in national security. The bonds would allow members of the public to invest in defence spending in return for interest and tax benefits similar to those offered by ISAs. Drawing on nationally representative polling, the paper finds that 42% of the public would be willing to invest, while issuing the bonds could increase positivity about national security, Britain as a nation and the government. The paper argues that, beyond raising revenue, the bonds could create a shared sense of contribution and ownership, helping rebuild national pride, strengthen public confidence in defence spending and support broader fiscal reform.