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John Healey, the former defence secretary, had been quietly advocating for the UK to join an international investment initiative aimed at boosting defence funding, according to information obtained by BBC News. This proposal involved the Defence, Security and Resilience Bank (DSRB), a multinational effort led by Canada designed to enable member nations to finance defence projects more affordably.
Sources close to Healey suggest that the Treasury was resistant to moving forward with discussions about the UK’s involvement in the DSRB. In his resignation letter, Healey emphasized that there were “credible ways” to increase defence budgets, including “working multi-nationally.” Treasury insiders also revealed that, aside from the Canadian-led bank, the chancellor had been exploring other partnership possibilities, such as talks with Poland about a “Multi-Lateral Defence Mechanism.”
The DSRB, which is scheduled to be officially launched at an upcoming Nato summit, would require new members to make an initial investment of roughly £870 million. Canada’s Prime Minister Mark Carney, a prominent promoter of the initiative, is reportedly eager for the UK to participate. Despite months of consideration by ministers, the chancellor appears reluctant to commit to the upfront cost for joining.
Healey stepped down citing that the funding allocated in the forthcoming Defence Investment Plan was “well short” of military requirements. He expressed concerns that Number 10 and the Treasury’s offer of around £10 billion in additional funding falls approximately £18 billion below what the armed forces have requested. Some believe that joining the DSRB could have helped fill this gap while also benefiting the UK’s defence industry. Several defence-focused Labour MPs have also been pushing ministers to give the bank serious consideration. However, with Chancellor Rachel Reeves signaling opposition to borrowing more money for defence, and questions raised by officials about whether the bank’s financial model primarily helps smaller economies, the future of UK participation remains uncertain
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