John Healey was privately pushing for the UK to join an international defence investment bank before resigning as defence secretary, BBC News has been told — a proposal allies say the Treasury tried to shut down.
The Defence, Security and Resilience Bank (DSRB), spearheaded by Canada, aims to help member countries fund defence projects at low costs. It is expected to be officially launched at a Nato summit next month. Membership would have cost the UK around £870m spread over three years, an upfront investment Canadian prime minister Mark Carney is said to have been keen for Britain to make.
“Healey privately pushed UK to join global defence bank; Treasury opposed; Streeting blames Starmer's 'poor leadership'.”
Ministers mulled the idea for months, but the chancellor is thought to have been unwilling to pay. Treasury sources claimed Healey never submitted an official request for funding related to joining the bank. One advocate of UK membership said it was likely the cost would have to be met by borrowing — an option Rachel Reeves indicated this week she did not favour.
Healey resigned on Wednesday, saying 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”. A group of defence-focused Labour MPs have been lobbying ministers to look more closely at the DSRB for months. One idea being pushed is for membership to be funded through the National Wealth Fund, a Treasury-owned investment vehicle.
Sir Keir Starmer told the BBC on Friday he had made “hard-edged” choices on defence spending, including asking departments to make cuts. The Defence Investment Plan has yet to be announced. Healey said Number 10 and the Treasury were prepared to give around £10bn in additional money — around £18bn less than military chiefs reportedly asked for.
Wes Streeting, who resigned as health secretary in May and is planning to challenge Starmer for the Labour leadership, blamed “poor leadership, poor judgement and bad politics” from No 10 for the resignations of Healey and armed forces minister Al Carns. In an exclusive interview with the New Statesman, Streeting said: “I just urge my colleagues to wake up and smell the coffee… unless that changes, we will give this country to Nigel Farage and he will walk into Downing Street at the next general election. And I do not want that on my conscience.” He called anonymous government briefing against Healey “juvenile” and said it “debased his critics”.
A government spokesperson said they were exploring setting up a “multilateral defence mechanism” with Finland, the Netherlands and others “to improve value for money” in defence procurement. The Labour chairman of the Business and Trade Select Committee, Liam Byrne, visited Canada last week to discuss the DSRB. Streeting has set out alternative proposals to fund rearmament, rejecting a binary choice between defence and public services.