Committee publication · Correspondence · 12 June 2026
Letter to the Prime Minister relating to multilateral defence investment, 12 June 2026
From: Business and Trade Committee
Inquiry: Industrial Strategy
Summary
The Business and Trade Committee writes to the Prime Minister urging the Government to reconsider its position on joining the Canadian-led Defence, Security and Resilience Bank (DSRB) or combining it with the UK's separate Multilateral Defence Mechanism (MDM). The committee argues both initiatives address complementary defence investment challenges and questions why the Government has not explored supporting both, particularly given defence funding shortfalls acknowledged by the outgoing Defence Secretary.
Key findings
- The DSRB intends to mobilise £100 billion in defence investment through loan guarantees to defence SMEs, addressing market failures in supply-chain financing, while the UK's separate MDM focuses on sovereign lending for jointly procured equipment with Finland and the Netherlands.
- The outgoing Defence Secretary John Healey warned the Defence Investment Plan falls short of requirements and noted credible multilateral funding approaches exist, yet the Government has not explored combining the DSRB and MDM despite their potential complementarity.
- The committee met Canadian defence industry partners and the DSRB Chief Negotiator in Canada, learning the UK would be 'warmly welcomed' as a partner, but the Government has stated it has no plans to join the DSRB.
- The committee identifies a £13 billion UK four-year defence commitment as potentially insufficient and questions why the Government is not maximising multilateral leverage opportunities with close allies ahead of the NATO summit.
Tone
AdversarialTopics
Key actors
Rt Hon Liam Byrne MP, Rt Hon Sir Keir Starmer KCB KC MP, Rt Hon John Healey MP, Canadian Government, Finland, Netherlands, NATO
Notable line
“With the UK facing difficult but necessary choices about investing in our future security …”
Key Quotes
“… falls well short of what is required for defence and the country at this dangerous time”
“… there are credible ways of meeting the mid-term funding challenges, working multi-nationally and as other European nations are doing”
“… the DSRB and the MDM could have a high degree of complementarity, targeting as they do linked but distinct issues in defence investment – market failures in …”
Source · parliament.uk record ↗