Healey wanted UK to join Global Defence Bank, BBC told
Former Defence Secretary John Healey pushed for Britain to join an international defence investment bank before Treasury officials shut down the proposal, according to allies close to the minister. The move would have marked a significant shift in how the UK funds its military capabilities amid mounting pressure to increase defence spending.
Sources familiar with the discussions say Healey championed the idea of joining the European Defence Fund’s investment mechanism, which has already attracted commitments worth €8 billion from member states. He believed it could unlock additional resources for British defence projects without immediately impacting the national budget.
But Treasury mandarins weren’t having it.
Treasury Concerns Over Sovereignty
Officials at Number 11 reportedly raised concerns about ceding control over defence procurement decisions to a multilateral institution. They argued that joining such a bank could compromise Britain’s independent defence policy and tie military spending to decisions made by other nations. The Treasury also questioned whether the UK would see proportional returns on its investment, given the competitive nature of defence contracts.
One government source told the BBC: “There were genuine worries about how this would work in practice. We’ve just left the EU, and here we were talking about joining an investment vehicle that could dictate where British defence money goes.”
Pressure on Defence Spending
The revelation comes as the government faces intense scrutiny over its commitment to raise defence spending to 2.5% of GDP. Currently sitting at 2.3%, the increase would require an additional £17 billion annually by 2030. Healey’s allies suggest the defence bank proposal was part of his strategy to bridge that gap through creative financing.
Similar institutions already operate successfully in other sectors. The European Investment Bank, for instance, has leveraged member state contributions to fund infrastructure projects worth over €60 billion in the past three years alone. And supporters of the defence bank concept argue it could have helped British manufacturers compete for lucrative European contracts.
What Happens Next
Yet the idea now appears dead in the water. Since Healey’s departure from the Ministry of Defence, there’s been no indication his successor will revive the proposal. Treasury sources insist bilateral defence partnerships remain the preferred approach for international military cooperation.
Still, the debate hasn’t gone away entirely. Several MPs on the Defence Select Committee have expressed interest in alternative funding mechanisms as traditional budget constraints tighten. With NATO allies increasing their own commitments and the security situation in Eastern Europe remaining volatile, pressure for innovative solutions to defence financing isn’t likely to disappear anytime soon.
