To ask His Majesty’s Government what progress they have made in respect of the AUKUS agreement, the defence and security partnership between the United Kingdom, Australia and the United States.
My Lords, for over a century there has been an enduring relationship between three trusting countries, Australia, the United Kingdom and the United States, all of which share embedded democratic values. In 2021, the three nations began a consultation process—particularly referencing Australia, which had been concerned by unwelcome Chinese naval activity in the Indo-Pacific region—to upgrade its submarine capability in partnership with the United Kingdom and the United States: AUKUS.
For us, our own defence thinking has extended to the Indo-Pacific, underscoring our passionate historic commitment to the freedom of the seas. A year ago, this consultation led to an agreement that Australia acquire conventionally armed nuclear-powered submarines through the trilateral partnership, which sends a clear message of our shared commitment to protecting global security and, most specifically, a secure and prosperous Indo-Pacific.
That consultation, in 2021, reflected great prescience. Since then, the world has become increasingly scarred by war and violence, such as Putin’s illegal invasion of Ukraine, supported by his linkages to countries such as North Korea and Iran. Violence in the Middle East has once again erupted, and in the Indo-Pacific China continues to assert itself, backed by a sustained build-up of military capabilities and indeed a close relationship with Russia. It is these national linkages that present democracies with a threat to the world we live in, attempting to rewrite the rules of the international order to better suit their interests. What happens in the Euro-Atlantic clearly now reverberates in the Indo-Pacific, and vice versa. The two regions are increasingly inextricably linked.
The UK is already fully integrated into the security architecture of the Euro-Atlantic, and in recent years His Majesty’s Government have chosen to engage the nations of the Indo-Pacific with much greater commitment, as well as to integrate the UK more deeply in the region’s security, while benefiting from the economic and business opportunities offered there. So far, we have been successful with trade agreements and, of course, our membership of the CPTPP. But it is AUKUS, the technology accelerator agreement signed between the UK and two of our closest Indo-Pacific partners, Australia and the United States, which promises to have the greatest potential impact on regional and, ultimately, global security.
Through pillar 1, which is concerned with equipping Australia with nuclear-powered submarines and Britain’s next-generation undersea capabilities, the United Kingdom is ensuring that its future defence infrastructure is of the highest standard. This will allow us to continue to participate with consequential impact in upholding a world free from coercion and the use of force in both the Euro-Atlantic and Indo-Pacific. In this spirit, it also specifically involves a rotational presence in Australia of one British submarine and four American submarines. Through pillar 2, which is concerned with accelerating and deepening the development and delivery of state-of-the-art military capabilities, the UK is further ensuring that in a world so influenced by advanced technology systems, we will not fall behind key developments.
My Lords, while the events in Ukraine and the Middle East have understandably engrossed the world’s attention, we have seen developments in the Indo-Pacific that signal its increasing geopolitical centrality: in 2022, China struck a security pact with the Solomon Islands; in January, Nauru switched diplomatic recognition from Taiwan to China; and, a month ago, Papua New Guinea confirmed early-stage talks with Beijing on a security and policing agreement. Post AUKUS, Chinese-driven media activity across several Pacific island nations demonstrates that China regards the agreement as a major impediment to its geopolitical ambitions, as does its concerted diplomatic pressure on smaller nations across the region.
I do not question the aims of AUKUS, but I have three questions about our approach to realising those aims and our capacity so to do. The first is about the future of submarine warfare. The last two years have seen advances in uncrewed submarine capabilities by our allies and our strategic adversaries. In Russia, the K-329 Belgorod submarines emerged—unmanned nuclear-powered submarines that purportedly offer nuclear-strike capabilities, as well as deterrence support. Last year, North Korea unveiled its first nuclear-armed unmanned submarine.
While encouraged by our own Project Cetus, I ask whether any assessment has been made of the extent, if any, that crewed, nuclear-strike submarines will have been superseded by the time Australia is building SSN-AUKUS boats. Given the rapidity of relevant technology advances, it would be useful to know if any such work has been or is likely to be commissioned.
Secondly, on our industrial capacity, can we meet our obligations under the AUKUS agreement’s optimal pathway? Each of the last Astute-class submarines under commission took around 130 months to complete. We are told that HMS “Agincourt” will commission after a 99-month build. Why does the MoD believe that we will be able to complete work on HMS “Agincourt” 31 months more rapidly than we did for the previous four submarines in the class and 13 months faster than BAE Systems has ever built an Astute?
My Lords, I refer to my register of interests: I am an honorary captain in the Royal Navy and chair of Wilton Park.
On 13 February, the Foreign Secretary broadly answered the question that we have put to ourselves today. I will return to two of the areas that he raised to pursue them further. He referred to the gain of about £4 billion-worth of contracts in generating thousands of jobs. I urge the Minister that we talk about AUKUS and job generation in a much wider context. As the noble Lord, Lord Risby, rightly said, this will be over several electoral cycles and some very difficult budget settlements; it therefore must be seen in the context of our national security and the freedom of the high seas, which is important to our prosperity.
The Foreign Secretary also referred to progress made on ITAR. He used an interesting phrase:
“a troubling issue that British Governments have had to deal with for decades with American Governments”.
He acknowledged that
“it is essential that AUKUS partners can trade freely between each other in defence equipment”.
He suggested in his answer that real progress had been made when
“President Biden signed the US National Defense Authorization Act, which enables licence-free trade between the AUKUS countries”,
but he added a note of caution by saying,
“and we are working with the State Department on the technical details to make sure that really happens”.—[Official Report, 13/2/24; col. 143.]
If, at its heart, AUKUS is a technology-accelerator agreement for the purpose of national defence, it is important for current members—and to any discussions about widening it, particularly to Japan and South Korea—that the ITAR question is satisfactorily resolved. Otherwise, we will not be able to trade freely.
I am grateful to the noble Lord, Lord Risby, for securing this debate. Momentum is crucial in AUKUS, not only because there is no time to waste in building up the capability and deterrence factor, but also because we should not assume that public and political opinion across our partner nations will remain static without clear signs of progress. It is vital that we make that progress on both pillars.
As the noble Lord, Lord Risby, rightly said, much of pillar 1 rests on the workforce. We need to get on with integrating and training across the UK and Australia in particular, which will co-operate deeply on SSN-AUKUS. What progress have the Government made in delivering specific AUKUS visas to enable workforce transfer in this regard?
Our country needs more advanced engineers, full stop. It particularly needs to be able to attract them into this specific programme. Key to that, as the noble Lord, Lord Risby, said, is building up Barrow’s capability and the nuclear capability in Derby. Both those towns need the infrastructure to attract and sustain the significant rise in numbers that will be needed. If the Minister wants to share with us what announcements will be made in the Budget next week on that, we would all be very grateful. This really is investing to save, because unless we can get the workforce up to speed, the cost overrun will dwarf anything that will be spent on the necessary infrastructure measures.
Team Barrow is doing heroic work, but a great responsibility rests on its shoulders. The engagement from the Cabinet Secretary, the Levelling-up Secretary and others is genuinely remarkable, but I hope that the Government will specifically focus on ensuring there is the institutional capacity in local institutions to deliver the economic development that is needed. The future of local enterprise partnerships remains in doubt across the country and development corporations have had difficulties. There needs to be something more in place.
My Lords, I congratulate the noble Lord, Lord Risby, on securing this timely debate. I support the AUKUS partnership with two of our strongest allies and welcome the progress made so far. However, although the United Kingdom still likes to regard itself as one of the world’s leading military powers, that claim is becoming ever more difficult to stand over, given the ongoing depletion of our Armed Forces. This is especially worrying at a time when our nation and the West face a greater threat from Russia than for many decades.
Against such a worrying backdrop, I find it astonishing that His Majesty’s Government continue to preside over such a brutal reduction in the size of the British Army. Under their watch, the Army is now a professional force of around 73,000 personnel. This compares with around 100,000 in 2010. This underlines why working in partnership with other nations is so critical for our security, although it should not be as vital as it currently is. Can the Minister tell the Committee whether there are plans to expand the AUKUS partnership beyond its current membership? The Legatum Institute has published a report recommending the integration of Canada into AUKUS pillar 2. Is this being considered?
It is obviously the case that the United States is by some distance the lead partner of the three current members, so much so that the outcome of the forthcoming US presidential election could be pivotal to the AUKUS agreement remaining in place. Can the Minister advise the Committee whether Mr Donald Trump has indicated his support for the creation of AUKUS and, more importantly, given a commitment to throw the full weight of his Administration behind it should he regain the presidency in November?
Last year, when announcing new funding to support the AUKUS programme, the Prime Minister suggested that it could create thousands of jobs in the United Kingdom. Can the Minister tell me whether any of these jobs will come to Belfast, which, as we well know, has such a long and illustrious history, both in shipbuilding at Harland & Wolff and in supplying the defence sector at Thales Air Defence Ltd, formerly Shorts Missiles Systems?
My Lords, when the Foreign Secretary answered Questions on AUKUS the week before last, he was euphoric, absolutely unbounded, in his enthusiasm for the agreement. I happily agreed with him on the undoubted attractions of AUKUS. I fully understand the potential upsides, particularly to the defence industrial base, jobs and national advantage. I did not want to appear cynical, but I asked him whether there had been any slightly more cautionary voices in the relevant NSC discussion regarding AUKUS. I have to say that I felt the Foreign Secretary was politely dismissive of the risks that I raised, such as losing, or at least leaking, specially nuclear-qualified personnel to Australia and the risks of cost escalation in a programme that might rapidly become non-discretionary in nature. In opening this debate, the noble Lord, Lord Risby, spoke of sustained expenditure until at least 2040.
From the Library pack provided to inform this short debate, I also now see that, as well as the self-evident delivery risk in increasing the drumbeat of submarine production, there appears to be a significant liability for British submarines to conduct both operational tours and extended port visits to Australia throughout the long period involved in generating the Australian capability. I worry that this must surely place at risk the operational requirements, at least for what we call two-boat availability, for standing tasks in closer-to-home waters.
Therefore, I again ask the Minister: has there been any recognition or discussion of attendant risks to this agreement and how to mitigate them? Or does it now represent an irreversible commitment which might place further constraints on the future flexibility required to bring into balance defence policy aspiration and the MoD’s available funding?
One might be tempted to ask similar questions about the Global Combat Air Programme, GCAP, a parallel initiative with Japan and Italy. Let me be clear: I am a huge supporter of advanced technology but, equally, I am concerned that the continued addiction of our procurement processes to pursuing ever more exquisite capabilities risks a future defence capability programme that, because it is underfunded, is also completely unbalanced.
My Lords, AUKUS is an acronym for a trilateral security partnership between Australia, the United Kingdom and the United States. There are two pillars, with defence capabilities, and in the first a conventionally armed, nuclear-powered submarine fleet for Australia, supported by the UK and the USA. The second pillar is co-operation in advanced capability, including AI.
As a trustee of Policy Exchange, I can say that we coined the term “Indo-Pacific”, as opposed to “Asia-Pacific”, as it used to be referred to. With the UK’s renewed policy focus in the Indo-Pacific, this is very timely. We have just joined the CPTPP. Should we join Quad, with India, the USA, Japan and Australia? The UK joining would make it Quad Plus, and we would circle the world. With our membership of NATO and Five Eyes, our security would be enhanced. However, would the Minister not agree—I am like a stuck record—that we should be spending 3% of GDP on defence? As the noble Lord, Lord Rogan, said, our Armed Forces, the Army, Navy and Air Force, are too small in numbers of people and short of equipment—and I say that as a proud honorary group captain in 601 Squadron of the Royal Air Force.
The Prime Minister assured us last March that an additional £5 billion would be provided by the MoD for the AUKUS programme and sustained funding would be provided. The Government have also said that this would create thousands of jobs here in the UK and, of course, in Australia.
Gideon Rachman wrote an excellent article in the FT just three days ago, where he said:
“China has repeatedly attacked Aukus as dangerous and confrontational. Shortly after it was launched, Boris Johnson, Britain’s prime minister at the time, gleefully lampooned the ‘raucous squawkus from the anti-Aukus caucus’”.
My Lords, I join in congratulating the noble Lord, Lord Risby, on sponsoring this important and timely debate. AUKUS is an agreement of the greatest significance, a very high-tech defence project within the non-proliferation framework. It is also a significant opportunity for Australia, Britain and the United States for employment and the development of leading-edge technology.
From all that we hear, things in general are proceeding well, but it is still very early days for AUKUS. My understanding is that there has been solid progress on where the project needs to go, but there remains a great deal of detail to be decided. I want to look at some detail on the workings between the partners.
The three countries are close allies, but there is a need for vigilance so that the opportunities and benefits are shared equally. The United States has a particular strength—an admirable strength—in defence technology. This is a very good thing. But there is a risk, and a very real one, that the tech opportunities will be taken by the United States at the expense of Australia and Britain. What steps are the Government taking to ensure that Britain and Australia benefit appropriately, as envisaged in what I believe to be the spirit and intent of the agreement? We need to be confident that the benefits are mutual.
It is intended that the UK and Australia also grow and enhance their technological, business and academic bases. The protection of IP is essential for the development of our industrial, academic and research bases. It is also vital for Britain and Australia to maintain and grow employment, especially under pillar 1. We also need to be vigilant to ensure that Britain does not end by losing skills, not least experienced Royal Navy engineers, to our very good Australian friends.
In a project of this scale and importance, it is essential that what might be termed a common information infrastructure is established, especially for the delivery of pillar 2 capabilities. We are assured that an advanced capabilities forum is in the process of being established as an essential vehicle for the exchange of information between government and industry trilaterally.
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AUKUS acts as a transparent and intensively close way of enhancing our trilateral relationship. It gives Britain a chance to share in the upgrading of the capabilities of two of our close partners. It is an opportunity of a magnitude that cannot be overstated. We already have a strong relationship with the US and Australia, but AUKUS plans to better operationalise this bond and take it to further heights.
AUKUS positions itself as an initiative that goes above and beyond the vagaries of electoral cycles, and indeed it must, as the project will require sustained effort and expenditure from Governments into the 2040s. It is a firm signal that we are placing greater emphasis on each others’ geostrategic sensibilities and objectives, but also embedding a long-term step-by-step strategic commitment.
In order to maximise the functional benefits of AUKUS, it must absolutely be viewed as a national endeavour, expressed as such and be given overarching focus across all relevant parts of government. This will enable us fully to embrace the generational commitment that AUKUS demands. It is a focused effort at building a more integrated deterrence posture. This will require increasing interoperability between the three nations. This enhanced interoperability informs collaborative projects through pillar 2, such as shared approaches to the next generation of advanced weaponry—for example, hypersonic missiles. There are obvious dangers associated with countries choosing not to obey the rules of the sea, and AUKUS is the UK, Australia and the USA united in their effort to resist and if necessary push back together against such activity.
A key element to ensuring that the long-term vision of AUKUS is realised will be enhanced people-to-people, governmental and educational links between the three countries. This is already beginning to happen. Regular port visits from British submarines to Western Australia in the 2030s will also further this, and I am encouraged to learn that Royal Australian Navy representatives have begun training at British and American nuclear-powered submarine schools. Is my noble friend the Minister content that we are adequately deepening our education and workforce development systems’ link with the United States and Australia, which is key to the realisation of the agreement?
The benefits of that long-term generational partnership will not be felt just in the realm of international security but here in Britain directly. We are experiencing the impact on shipping and the British economy that Houthi attacks in the Red Sea are having. AUKUS contributes to Britain’s ability to resist and detect such activity, as well as to deter actors from disruptive action, wherever it arises.
What we know is that the nature of defence and warfare is changing dramatically, such that in pillar 2, key areas have been identified for sharing and development. Fundamentally, they are undersea capabilities, but also quantum technologies, artificial intelligence, advanced cyber, hypersonic and counter-hypersonic capabilities, electronic warfare, and innovation and information sharing.
The Minister will know of the 17 working groups that have been established. Can he indicate how their functioning is progressing? All this work to bring the pillars to fruition highlights the intensity of shared mutual trust. Indeed, the evolution of AUKUS is being watched with positive interest by New Zealand, Japan and South Korea, all of which have security concerns.
Of considerable and enduring importance, AUKUS offers a concerted attempt to integrate our top civil and private companies with our own industrial base. This will in turn stimulate the British economy by providing jobs and improving skills—a transformative boost, particularly for the local economy of Barrow-in-Furness, where the new submarines will be built. In fact, as Barrow is so pivotal to AUKUS, I must ask the Minister if he is satisfied that there is an adequate skills base there, what we are doing to upgrade it and whether the transportation system in and around Barrow is appropriate for the construction of AUKUS submarines.
The people of the United Kingdom want to live in a world free from coercion and blatant aggression. Today, this vision is under increasing pressure. We thus need bold new ideas, and to pursue them in tandem with our closest allies and partners. AUKUS is key to this. It is about investing in and with our partners, shoulder to shoulder, for the future, so that we can uphold and maintain the international order that has benefited us and many others so greatly.
Lastly, on the reliability of the MoD’s financial estimates, on 7 December I asked why the three services have different approaches to cost forecasting, with the Navy and RAF including predicted costs for the capabilities planned while the Army includes only what it can afford. The noble Earl the Minister said that he was in “entire agreement” on the question of consistency and conceded that in 40 years of looking at budgets he had
“never seen a budget that resembles anything like this one”.—[Official Report, 7/12/23; col. 1570.]
On top of this supervening inconsistency, we have seen the NAO describe the MoD’s equipment plan to 2033 as “unaffordable”; the MoD’s own worst-case forecast concedes a funding gap of almost £30 billion. What financial contingencies has the Minister’s department instituted or considered to ensure that we meet all our pillar 1 and 2 AUKUS obligations? Any assurance in the Minister’s answers to these questions would be extremely welcome.
I think that it is generally accepted that the current membership of AUKUS pillar 1 is unlikely to have additional partners, but when it comes to pillar 2, on advanced military technology, we might even look at countries such as Canada. I suggest that the Minister should also not forget about the importance of France as a major Indo-Pacific power.
The key issue that I want to leave the Minister with is that Bloomberg recently estimated that if there were to be a blockade on the Taiwan Strait it would cost the economy some $10 trillion. All these debates, whether on AUKUS, additional partners or technology, have to be seen in the context of free world trade, the freedom of the high seas and our collective prosperity.
Finally, the Government must ensure that pillar 2 is a concurrent commitment and not sequential. We need greater engagement with industry and we need Ministers consistently to show the public that this is an economic and security priority. Without that, we will not hope to maintain the consensus that is needed.
The noble Lord, Lord Browne, mentioned the situation in the South China Sea region. The Committee will know of my unwavering support for the Government of Taiwan and my determination to protect their people from the aggressive actions of the communist regime in Beijing. Given the global reach of AUKUS and the US Government’s recent welcome decision to sell arms worth $75 million to Taiwan, has it been made clear to the democratically elected representatives in Taipei that the partnership stands fully with them and against the increasingly frequent incursions of Chinese military aircraft across the median line of the Taiwan Strait into Taiwan’s northern air defence identification zone?
Similarly, we simply cannot put up with the constant straying of Chinese military vessels into Taiwanese territorial waters, with the most recent incident occurring as recently as Monday of this week, when five Chinese coastguard ships approached the frontier line in Kinmen.
“The pact is ultimately a statement of resolve and long-term commitment. It is based on a shared perception of the growing strategic threat from China and Russia as they work together to overturn the current international order. That perception seems more pressing and valid than ever”.
I thank the noble Lord, Lord Risby, for initiating this debate and raising awareness of AUKUS, which people need to know more about. I love the way he referred to it as a technology-accelerator agreement. There is huge potential in enhancing our security and powering ahead with our innovation and research and development capabilities—all things at which this country has always been absolutely brilliant.
For Britain and Australia, negotiations to gain approval under the US International Traffic in Arms Regulations regime—ITAR—as outlined by the noble Baroness, Lady Stuart, could inadvertently handicap broader UK exports outside of the AUKUS partners. Discussions with ITAR must be carefully handled, and with great attention.
A final point: the three nations are close allies and very good friends. The behaviour between them over the next 20 years and more will be critical to the success of AUKUS. Given its long-term nature, it is necessary to bear in mind that there will be elections in each country, very likely at different times, as pointed out by the noble Lord, Lord Risby. There is a need for great tact and understanding between the partners. What thoughts does the Minister have has on this serious requirement?