John Healey was privately pushing for the UK to join an international investment bank to raise more money for defence spending before he resigned this week, BBC News has been told. Allies of the former defence secretary claim the Treasury tried to shut down negotiations for the UK to join the Defence, Security and Resilience Bank (DSRB), an idea spearheaded by Canadian prime minister Mark Carney. The DSRB, which aims to help member countries fund defence projects at low costs, is expected to be officially launched at a Nato summit next month. Membership for the UK and other G7 countries would come with an upfront investment cost of around £870m spread over three years.
Healey resigned on Wednesday, saying the amount of money attached to the government's upcoming Defence Investment Plan fell "well short" of what was needed. In his resignation letter he said there were "credible ways" to fund extra defence spending, including "working multi-nationally". Number 10 and the Treasury were prepared to give around £10bn in additional money in this plan, around £18bn less than what military chiefs have reportedly asked for. Sir Keir Starmer told the BBC on Friday he had made "hard-edged" choices on defence spending, including asking government departments to make cuts to help pay for it.
“John Healey privately pushed for UK to join global defence bank before resigning, allies say Treasury blocked idea.”
Cabinet ministers have now been asked to look for more money in their departments to fund an increase in defence spending after Healey's resignation. The culture secretary, Lisa Nandy, told the BBC that her department was among those still in conversations with the Treasury about finding further sums for defence. "It's the responsibility of all of us to do what is the first duty of any government, which is to keep this country safe," she said. Dan Jarvis, who replaced Healey as defence secretary, has been given until the Nato summit in Ankara in a fortnight's time to offer up an alternative plan.
The row has also prompted a blistering intervention from former health secretary Wes Streeting, who resigned in May and is planning to challenge Starmer for the Labour leadership. In an exclusive interview with the New Statesman, Streeting blamed "poor leadership, poor judgement and bad politics" from No 10 for the resignations of Healey and armed forces minister Al Carns. "I just urge my colleagues to wake up and smell the coffee if they haven't already," Streeting said. "To take really seriously what John Healey and Al Carns have said about the defence of our country and to understand that at the heart of these challenges is poor leadership, poor judgement and bad politics. And unless that changes, we will give this country to Nigel Farage and he will walk into Downing Street at the next general election."
Streeting described the government briefing against Healey as "juvenile" and said it "debased his critics". He has rejected the idea of a binary choice between spending on defence and spending on public services, floating alternative proposals for rearmament funding if he were to become prime minister. Treasury sources claimed Healey never submitted an official request for funding related to the UK's membership of the DSRB. But one advocate of the UK joining the bank said it was likely that the up-front cost would have to be paid for by borrowing, an approach Chancellor Rachel Reeves has indicated she does not favour. The Defence Investment Plan has yet to be announced.