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Britain Enters Talks to Join Canada's Defence Bank

The move would let London tap pooled low-cost loans for arms projects and give Chancellor John Healey a way to boost defence investment without breaching fiscal rules.

Britain’s Prime Minister Andy Burnham stands by destroyed Russian vehicles displayed at Mykhailivska Square (St Michael’s Square) in the old part of Kyiv (Photo: Henry Nicholls/AP)
Prime Minister Mark Carney speaks at the General Dynamics defence manufacturing facility in London, Ont., in July. Canada has so far signed up eight other countries for the Defence, Security and Resilience Bank.

Overview

  • The Burnham government, led in negotiations by Chancellor John Healey, is holding active talks with Canada about UK membership of the Defence, Security and Resilience Bank but has not set a decision date and may opt for a lighter public step such as a joint statement.
  • The DSRB is a Canada-led pooled-finance institution that uses member capital as guarantees to borrow cheaply on markets and then lends that money to governments and defence firms for long-term projects.
  • Former Chancellor Rachel Reeves declined to back UK membership, citing an estimated upfront contribution of about £870 million over three years and doubts the bank would solve Britain’s procurement bottlenecks.
  • The UK is simultaneously committed to a separate Multilateral Defence Mechanism with the Netherlands, Finland and Poland and government officials say the two schemes are intended to be complementary rather than duplicative.
  • Supporters say UK entry could unlock large-scale defence lending and speed contracts for British firms, and could prompt bigger European powers such as Germany to join, reshaping how NATO and European states fund major military industrial projects.