British defence firms are being de-banked as the investment plan stalls, MPs told
A rising share of UK defence companies are being refused overdrafts and working capital, Make UK Defence told the Treasury Committee, blaming the stalled Defence Investment Plan.
A rising share of UK defence companies are being refused overdrafts and working capital, Make UK Defence told the Treasury Committee, blaming the stalled Defence Investment Plan.
A growing share of British defence companies are being de-banked, refused overdrafts, and denied working capital, the director-general of Make UK Defence told the Treasury Committee on June 3, the UK Defence Journal reported. Andrew Kinniburgh, whose body represents nearly 1,000 firms including the major primes, said members reporting problems with financial services climbed from 11% to 17% over the past year.
Kinniburgh said the cause was muddied. A bank will question any firm with a shaky balance sheet, he said, and the larger drag is the government's stalled Defence Investment Plan, the 10-year funding roadmap due in autumn 2025 and still unpublished. Publishing it with a clear timeline would "let the brakes off" on overdrafts and working capital, he said.
The strain runs wider than one trade body. A majority of UK defence-technology firms have suffered financial harm from the delay, a survey by PA Media found. Trade body ADS told MPs that some small and medium firms are "really struggling," and unions called the hold-up a threat to British jobs and skills.
The UK is "stuck on 2.6%" of GDP on defence, short of a "credible defence deterrent," Kinniburgh said, and needs a path to 3.5%. RAND Europe's Lucia Retter told the same session that the capability gap leaves Britain's "deterrence posture more brittle than we would like."
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Subscribe Free →Defence Secretary John Healey said Prime Minister Keir Starmer is "determined to publish" the investment plan before the NATO summit that opens July 7. Until they see it, Kinniburgh said, even the largest contractors are holding off, weighing Germany, Poland, the Baltics and the United States against a Britain whose own defence firms cannot get an overdraft.
Frequently Asked Questions
What does "de-banking" mean here?
Andrew Kinniburgh of Make UK Defence told the Treasury Committee it covers defence firms being refused overdrafts, denied working capital, or cut off from retail and business banking, venture capital and private equity, the UK Defence Journal reported.
How many firms are affected?
Kinniburgh, whose body represents nearly 1,000 defence companies, said the share reporting problems with financial services rose from 11% to 17% over the past year, according to the UK Defence Journal.
Are banks deliberately disinvesting from defence?
Kinniburgh said the picture is "muddied." Banks will question any firm with a weak balance sheet, and he tied much of the problem to the absence of the Defence Investment Plan rather than a clear policy to exit the sector, the UK Defence Journal reported.
What is the Defence Investment Plan?
It is the government's 10-year roadmap setting out how new equipment and defence infrastructure will be funded. It was expected in autumn 2025 and remains unpublished, the BBC reported.
When will the plan be published?
Defence Secretary John Healey said Prime Minister Keir Starmer is "determined to publish" it before the NATO summit that opens July 7, the BBC reported, though ministers have not confirmed a firm date.
Marcus Schuler
Marcus Schuler edits BattlePolicy, a daily defense-technology brief connecting the companies and capabilities behind modern war to the contest among Europe, the US, Russia, and China.