The UK government is considering joining the Defence, Security and Resilience Bank, a proposed multilateral institution intended to help governments raise money for defence projects, according to the supplied BBC News report.
Chancellor John Healey is examining a possible bid to join the bank, despite the idea having been rejected by his predecessor, Rachel Reeves. Canada is leading efforts to establish the institution. Supporters say it could allow participating governments to borrow at lower costs and increase spending on military programmes.
Treasury officials said no decision had been made. A government spokesperson said the UK was “fully committed to working alongside our international partners to scale defence industrial capacity” and was working with Canada to ensure the bank complemented the Multilateral Defence Mechanism.
The bank already has backing from Albania, Bulgaria, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine, the BBC report said. Membership for the UK and other G7 countries would involve an upfront investment of about £870m, spread across three years.
The possible membership comes as the government considers how to finance higher defence commitments. The report said Healey faces pressure over defence funding ahead of the Budget in October and next year’s spending review. The government has not committed to increasing defence spending to 3% of national income by 2030, while maintaining a longer-term target of 3.5% by 2035.
According to the BBC, Healey previously supported UK membership while serving as defence secretary, viewing multinational arrangements as one possible way to fund additional spending. He later resigned in June, saying the Treasury had not provided sufficient resources and citing “credible ways” to fund increased defence investment, including international cooperation.