Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the Multilateral Defence Mechanism on economic growth.

The Multilateral Defence Mechanism (MDM) is an innovative and creative way of financing defence spending that provides greater purchasing power, allowing participating countries to improve their capability within unavoidable fiscal constraints.

Its focus on joint procurement will aggregate demand and standardise defence procurement, pushing down the costs of buying equipment and making our money stretch further, as well as giving greater demand certainty for industry and helping to fix defence cost inflation. Stockpiling consumables on the MDM’s balance sheet will enable the UK to invest more upfront without crowding out other spending.

The MDM will provide supply chain financing – including to SMEs - to deliver orders, expand production and remove financial bottlenecks and will have the option to support early-stage R&D innovation and capability development. This will support economic growth and the development of the UK defence industrial base.