The UK government is considering joining a global investment bank designed to help countries raise more money for defence spending.
Chancellor John Healey is looking at a possible UK membership of the Defence, Security and Resilience Bank (DSRB). His predecessor, Rachel Reeves, had previously rejected the idea.
Canada is leading efforts to establish the multilateral bank. Supporters say it could help governments secure cheaper loans for defence projects and expand military production.
However, Treasury officials stressed that the UK has not made a final decision. A government spokesperson said ministers remain committed to working with international partners to expand defence industrial capacity.
UK Defence Spending Under Pressure
The possible DSRB membership comes as the government faces growing pressure over defence spending.
The UK would need to invest around £870 million over three years if it joins the bank. Other G7 countries could also face an upfront investment if they become members.
The bank already has support from Albania, Bulgaria, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine.
For Healey, finding money for defence remains a major challenge. He is preparing for the October Budget and next year’s spending review.
The government has so far stopped short of committing to spend 3% of national income on defence by 2030. Instead, ministers continue to point to a longer-term target of 3.5% by 2035.
Healey Previously Supported the Bank
Healey had already backed the DSRB idea while serving as defence secretary.
He privately supported UK membership as one possible way to raise additional money for defence. He resigned in June and said the Treasury had not provided enough resources to meet the country’s defence needs.
In his resignation letter, Healey said there were “credible ways” to fund higher defence spending. He included greater multinational cooperation among those options.
The latest discussions suggest the government is again examining the bank as part of its wider defence funding plans.
A government spokesperson said the UK is working closely with Canada. The government also said it wants the proposed Multilateral Defence Mechanism and the Defence, Security and Resilience Bank to work together.
Nato Warns of Growing Security Threats
The discussions come amid heightened security concerns across Europe.
Nato Secretary General Mark Rutte is travelling to the UK for his first meeting with the prime minister. He is also due to give a speech in Oxfordshire.
Rutte is expected to stress that the UK remains serious about security. He is also expected to praise British support for Ukraine.
He will reportedly say Nato will not be intimidated by Russia’s hostile actions. The comments come after Nato forces shot down a drone over Lithuania.
The incident added to concerns along Nato’s eastern flank as Russia’s war in Ukraine continues.
Denmark also accused a Russian warship of firing two emergency flares at one of its helicopters on Tuesday. The helicopter had been tracking the vessel in the Baltic Sea.
Against this backdrop, the UK is examining different ways to strengthen defence funding. Joining the DSRB could provide another financing option, although officials have yet to make a final decision.
