UK-US Co-operation on Using Atomic Energy for Mutual Defence

Lord Bilimoria Excerpts

Wednesday 23rd October 2024 Grand Committee

[Lord Bilimoria (CB)]

My Lords, AUKUS is of course an acronym for the trilateral security partnership between Australia, the United Kingdom and the United States. There are two pillars of defence: first, a conventionally armed nuclear-powered submarine fleet for Australia, supported by the UK and the USA; secondly, 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 on the Indo-Pacific, that is timely. We have joined the CPTPP. We should also join the Quad, with India, the USA, Japan and Australia, making it Quad Plus, circling the world. Does the Minister agree? That would enhance our membership of NATO and Five Eyes, and our security would be greatly enhanced, but—I will come back to this later—we should spend 3% of our GDP on defence. Our Armed Forces—the Army, the Navy and the Air Force—are far too small in numbers of people; I say that as a proud honorary group captain in 601 Squadron of the RAF.

Prime Minister Rishi Sunak assured us in March 2023 that an additional £5 billion would be provided by the MoD for the AUKUS programme and that sustained funding would be provided. Can the Minister confirm that? The Government have also said that this would create thousands of jobs here in the UK and in Australia.

Gideon Rachman wrote an excellent article in the FT this February in which 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’”.


He concluded:

“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”.


He said that in February, and it is truer than ever now.

The noble Lord, Lord Risby, who led a debate on AUKUS in February this year, referred to AUKUS as a “technology accelerator”. I think that is fantastic, because there is huge potential in enhancing our security but also powering ahead with our innovation and research and development capabilities—all things that this country has always been fantastic at.

When I was president of the CBI, one of my priorities was to promote government, business and universities working together, not just in the UK but across borders. As chancellor of the University of Birmingham, I was very proud when we won two Queen’s Anniversary Prizes, one of them for Rolls-Royce and its work in aero engines. We have seen time and again that when you do cross-border collaboration between two universities—in Birmingham’s case, with Panjab University in India or with Harvard University in the United States—the field-weighted impact of collaborative research is three times higher than if the university does it on its own. Could the Government through AUKUS promote this cross-border, collaborative approach, with universities, government and business working together?

Pillar 1 of AUKUS focuses on supporting Australia to acquire its first conventionally armed nuclear-powered submarine fleet, as the noble and learned Lord, Lord Goldsmith, said in his excellent opening speech. It does not involve the transfer of nuclear weapons to Australia. Pillar 2 focuses on co-operation in eight advanced military capability areas: artificial intelligence, quantum technologies, innovation, information-sharing, cyber, undersea, hypersonic and counter-hypersonic, and electronic warfare domains.

The UK-US mutual defence agreement, which many noble Lords spoke about, was established in 1958 for co-operation on nuclear materials, technology and defence and is meant to be renewed every 10 years. This seeks to extend naval nuclear propulsion co-operation to all naval vessels, and the proposal now removes the 10-year renewal requirement for Article III bis—as the noble and learned Lord, Lord Goldsmith, mentioned—allowing continuous co-operation. We have been assured of the Government’s commitment to transparency and parliamentary accountability within national security limits. However, there are concerns over reduced parliamentary oversight with the removal of routine reviews of Article III bis. That is worrying. Here is a fact: the MDA amendments would lessen routine parliamentary scrutiny. On the other hand, the United States Congress will conduct far more rigorous scrutiny than us over here in the UK Parliament. Do the Government feel that this is a healthy position to be in?

Pillar 1 focuses on Australia’s acquisition of a nuclear-powered submarine fleet, leveraging UK submarine design and technology, with £3 billion allocated over two years. Pillar 2 emphasises developing advanced capabilities—AI, hypersonic and quantum technology, as I said earlier—and enhances interoperability among armed forces. The UK hosted the first AUKUS AI trial in April 2023, demonstrating this military collaboration, which I will come to later.

However, concerns exist about US export regulations impacting co-operation. An open general licence was issued for AUKUS nations as of 1 September 2024, and the Minister, Luke Pollard, outlined ongoing efforts with AUKUS partners to develop undersea capabilities, including launching and recovering uncrewed underwater systems from British and American submarines, integrating this into the SSN-AUKUS design.

The traditional NATO structure was to be a deterrent to Soviet expansion, but with AUKUS members there are huge incentives: for Australia, the concerns over China’s military growth and sovereignty threats; for the UK, to deepen our ties with the United States, enhance military collaboration and expand Pacific exports; for the United States, to maintain military dominance against rising Chinese and Russian assertiveness.

On Australia’s industry capacity constraints, there is scepticism in some quarters in Australia about AUKUS that we continue to need to address. The evolution of AUKUS could yield a new form of plurilateral defence alliance, addressing collaborative military capability needs and the emphasis on flexible investments in inter- operable military capabilities to adapt to geopolitical threats. This also strengthens the UK’s position in global security and military collaboration, and opportunities for technological advancement and military exports, particularly in the Indo-Pacific.

For over 65 years, the UK and the US have co-operated on defence nuclear issues. Established as an amendment to the post-World War II US non-proliferation law, the MDA exempts allies from making significant advancements in nuclear weapons from the general ban on exchange leading to proliferation.

I will be absolutely clear about the three amendments. Article 4 makes naval nuclear propulsion co-operation reciprocal, allowing the UK to share technology and information with the US. Article 5 removes the expiry provisions of Article III bis, allowing the MDA to remain in force on an “enduring basis”, which I have spoken about, and eliminating the 10-year renewal requirement. Article 13 ensures that the information, material or equipment shared under the MDA will remain protected if terminated by either party in the future. But no one has mentioned this: a joint nuclear skills plan aims to double apprentices in the sector, enhancing the workforce. We have a Budget coming up. I hope that the Government address the huge flaws in our apprentice system. The apprenticeship levy needs to be reformed wholesale, and with regard to AUKUS. Does the Minister agree?

The review will maintain UK defence ties in the Indo-Pacific, prioritising objectives to create a deliverable defence plan supporting AUKUS. Is this a separate plan? Will it be apart from the strategic defence review or part of it?

As I mentioned earlier, we had a world first as the UK hosted the inaugural AUKUS AI and autonomy trial. This exemplified strong trilateral co-operation in AI capabilities, enhancing operational effectiveness and decision-making speed. Over 70 military and civilian defence personnel and industry contractors participated in the AUKUS AI trial, involving various air and ground vehicles. Milestones included live retraining of AI models inflight and immediate sharing of updated information among AUKUS partners, which is tremendous news.

The reforms will lift export controls, potentially covering £500 million of UK defence exports annually. The UK has issued an open general licence, easing licensing requirements for advanced defence capabilities and technical data among AUKUS partners.

The noble Lord, Lord Hannan, referred to this: there are discussions about expanding AUKUS to Canada, South Korea, Japan and New Zealand, but I am led to believe that these nations are not yet ready to proceed. Could the Minister confirm whether the Government are encouraging this expansion? US export regulations, particularly ITAR, hinder collaborative defence innovation, posing significant challenges for AUKUS. Could he address that issue?

In 2019, in the debate on NATO’s 70th anniversary, I said that we should spend 3% of GDP on defence. I said that five years ago, and I have been like a stuck record ever since. The MoD is facing funding challenges. Our defence budget today is £54.2 billion. Our spending on defence was higher in real terms in 2010, at £57 billion, than today. That was a golden era for our Chinese relationship and with no threat from Russia and Ukraine. There was not a huge conflict going on in the Middle East, as we have today. We are spending too little on defence.

Our full-time Armed Forces number 192,760 in total—Army, Navy and Air Force combined. I have said this time and again: my father’s army, the central army in India, was 350,000 strong. In the debate on the strategic defence review earlier this month, the noble and gallant Lord, Lord Stirrup, said that we have a

“shrinking and hollowing out of our Armed Forces”,—[Official Report, 9/10/24; col. GC 226.]

and the noble Lord, Lord West, said that

“money was the elephant in the room”.—[Official Report, 9/10/24; col. GC 227.]

I concluded my speech by saying that:

“The price of freedom is not free”.—[Official Report, 9/10/24; col. GC 250.]