Defence Committee chair presses Healey on financing

The chair of the House of Commons Defence Committee pressed the Defence Secretary on how the UK will pay for rising military spending during a statement in the House.

Tanmanjeet Singh Dhesi, the Labour MP for Slough who chairs the committee, raised a series of defence financing options, telling the House that members had advocated for defence bonds and that his committee had examined mechanisms including the Defence, Security and Resilience Bank. He noted that the idea had been developed by a former British Army officer but that other countries had moved first, saying the Canadians had “stolen the march on us.” He added that some nations had “opted for a loosening of the fiscal rules just for defence.”

Dhesi framed the question as one of pace rather than a choice between approaches. “Obviously this is not an either or option, but given the increased threats and the level of volatility, we must accelerate investment in defence to 3% GDP spend in this Parliament,” he said, pressing the Secretary of State on the government’s intended course of action. “We cannot keep plodding along at the current pace, we must meet the moment,” he told MPs.

Healey rejected the suggestion that the government was moving slowly. He said his description of the biggest increase in defence spending since the end of the Cold War was hardly a plodding path, and welcomed the committee’s inquiry and its report into defence investment. “We know we must spend more, faster,” he said. “And I just say to him, we will.”

The Defence Secretary pointed to work commissioned from a former prime minister on how security might be paid for in future. He told the House that Gordon Brown had been commissioned by the Prime Minister to examine the multinational financing of security, and that the government would use his report as part of that effort. Healey also invoked the Prime Minister’s address to the Munich Security Conference in February, when Sir Keir Starmer said the UK must build hard power because that was the currency of the age.

The Defence, Security and Resilience Bank that Dhesi referred to is a proposed multilateral, state-backed institution intended to provide low-cost financing for defence, security and resilience projects and to draw private capital into the sector.

Canada has taken a leading role in establishing it, hosting charter negotiations in Montreal and agreeing to host the future headquarters, with several major Canadian banks backing the development group. The concept originated with Rob Murray, a former British Army officer and former head of innovation at NATO, and is designed in part to help allies meet the spending pledge agreed at the 2025 NATO summit in The Hague.