AUKUS Defence Partnership

Lord Lee of Trafford Excerpts

Thursday 16th March 2023 Lords Chamber

[Lord Coaker (Lab)]

My Lords, I start by saying that His Majesty’s Opposition fully support the AUKUS defence partnership that has been announced by the Government. It is a multi-decade agreement with two of our closest and strongest allies. It is of immense importance when we look forward to the threats we face now and in the future. It strengthens our strategic security and prosperity in the Indo-Pacific. As such, it should be seen as a national endeavour and a statement of our intent, with our allies and our friends, to stand up for freedom, democracy and human rights across the world.

Can the Minister reassure us, notwithstanding the obvious immediate threat to Ukraine from Russia and the fact that the first of these new submarines is some way off, that we have the surface fleet and the strategic alliances that we need to deal with the threats that we now face in that region? Or is it the case that, if we are to commit to the Indo-Pacific tilt, more resources will be needed in numbers of ships and planes and protection for the carriers?

There will obviously be a welcome boost to defence jobs, with these new submarines being built in Barrow and with nuclear work in Derby, as well as elsewhere across our country. Given the very real current skills shortage, how will the Government work with industry to ensure that we have the necessary skilled workforce to actually do this building? Can the Minister give us some idea of how many jobs are expected to be created? Can she also confirm the number of additional submarines to be built for the UK and what size this will eventually bring the UK’s submarine fleet up to? The first SSN-AUKUS for our UK Navy will commence in the late 2020s and will be operational as early as the late 2030s. What steps are the Government taking to ensure that these costs and timelines will be kept to?

Alongside those issues, I commend the Government on the steps they have taken to work with the International Atomic Energy Agency to alleviate concerns around nuclear proliferation requirements. The agreement involves the transfer to Australia of technology, equipment and a naval nuclear propulsion capability. Can the Minister lay out clearly for the Chamber how this agreement maintains our compliance with the nuclear non-proliferation treaty and what steps the Government have taken or will take to reassure those who may be upset by this agreement? Of course, this must not prevent us taking measures for our security and that of others, but the Government quite rightly have been sensitive to the consequences, not only for countries such as China but as regards what others may think and that those countries may try to use it as a justification to act. Crucially, can the Minister confirm that the director-general of the IAEA has expressed their satisfaction with our engagement and that we will work closely with the IAEA over the coming years?

The UK’s former National Security Adviser, Sir Stephen Lovegrove, said of the pact:

“It is perhaps the most significant capability collaboration anywhere in the world in the past six decades.”


He said that because it is not just about submarines but, as pillar 2 of the agreement describes, about cyber, hypersonics, artificial intelligence and so on. Little detail has been given about this, so could the Minister give us any further updates on the sort of collaboration that may take place under pillar 2?

The integrated review says that £3 billion will be invested across the defence nuclear enterprise. Can the Minister confirm that resources are there to properly fund this pact over its lifetime and that those resources will not lead to cuts in the budget elsewhere? Would not all our defence, including this, be helped by a timescale rather than an aspiration to reach 2.5% of GDP on defence spending? I remind the Minister that that has not been the case since 2010.

Finally, as I said, we can be proud of this endeavour as a country. It will help to ensure that we protect our interests, not only in Europe but beyond in the Indo-Pacific, working with others to support democracy and freedom as we have always done. As such, His Majesty’s Opposition fully support it and wish it well.

[Lord Lee of Trafford (LD)]

My Lords, we on these Benches very much welcome the AUKUS partnership announcement and Statement for the whole range of fairly obvious reasons that the noble Lord set out. However, has the Minister seen the comments in yesterday’s Times from Rear Admiral Philip Mathias, a former director of nuclear policy and of the Trident value-for-money review? He said:

“The performance of the Submarine Delivery Agency has been abysmal. Astute class submarines are being delivered late by BAE … HMS Vanguard’s refit by Babcock has taken more than seven years; and … The in-service date for HMS Dreadnought”—


originally 2024—now will not come through until the early 2030s. Have the Government done any work at all as regards submarine construction refit on comparing the performance of Barrow and our shipbuilding industry with the performance achieved in the United States and France? That would be a very interesting comparison. In addition, given that we are likely to have an increase in our submarine fleet, which would be very welcome, what plans are there to increase and train the number of submariners who will be needed for those future boats?

[The Minister of State, Ministry of Defence (Baroness Goldie) (Con)]

My Lords, I am sorry for the delay—I was caught on the hop. I thought that the noble Lord, Lord Lee, might take a little longer but, however brief his contribution, it is welcome.

I first thank the noble Lord, Lord Coaker, for his warm reception of the announcement on AUKUS. I am particularly grateful for his important recognition of the reality of the geopolitical environment in which we all exist today. I think the IR refresh has poignantly delineated that, building on what we identified in 2021 but quite rightly pointing out that events have moved at a pace that we perhaps had not anticipated. We therefore have to be ready to deal with that.

I am very grateful to the noble Lord for particularly recognising the significance of the AUKUS announcement. As a child I lived very near the Clyde, and I can remember when these sorts of events were happening. This is almost on par with the agreement of 1958 between the UK and the United States—it is that sort of seismic milestone. I think the noble Lord recognises that, and I am grateful to him for doing so.

To address the remarks from the noble Lord, Lord Lee, with reference to our preparedness to take this on, I too read the letter in yesterday’s Times and I have great respect for our former senior personnel within our Armed Forces. I think I can say on the challenges that have confronted the MoD over a period of perhaps 10 to 15 years on procurement—I have said before at this Dispatch Box that I do not in any way seek to rewrite history or pretend that these challenges did not exist—that precisely because we encountered them, we have dramatically reformed how we deal with procurement. To be fair, that has been recognised in recent years by both the National Audit Office and the Public Accounts Committee.

Very good progress has now been made on the Astute programme, as the noble Lord is probably aware. We have in the water four of our Astute-class submarines—in fact, it could even be five—but the recent one, “Agincourt” is on sea trials, and then we have one more to go. Therefore, I think we have five in the water and then “Agincourt”, and the seventh one is being completed. Very good progress is being made. I am satisfied that, with the procurement reforms that have been made within the MoD, there is a much greater resilience and a much more robust framework and process, not least because we have had a frank talk with industry, as it has to play its part in this. We are laying out our expectation from industry at a very early stage, so that there are not these extraordinary debates five years down the line about what the MoD thought it was ordering. When we manage the contract for an important procurement delivery, we now have a senior responsible officer, who will not change every five minutes but will be in place for a meaningful period during the conduct of the contract. Therefore, I seek to reassure the noble Lord that, although I absolutely respect the right of the Times letter writer to air his views, we can see tangible change, both in the MoD and in the conduct of industry, and that is bearing fruit.

The noble Lord, Lord Coaker, also asked whether the two aspirations of Euro-Atlantic security and the Indo-Pacific tilt are in some way mutually exclusive. No, they are not; they are two important tandem activities for the UK Government and for defence. As he will be aware, within the integrated review refresh, the primary immediate threat was indeed Euro-Atlantic security and the illegal incursion by Russia into Ukraine. We see that as a short to medium-term threat. However, for the reasons identified in the IR refresh, we regard the Indo-Pacific tilt as now having happened and to be sustained. He will be aware of what the MoD has been doing to sustain that, not least with the carrier strike group 21 and with the permanent deployment of our two vessels, “Tamar” and “Spey”, out in the south-east China seas. They are playing an important role.

The noble Lord asked particularly about jobs, and it is perfectly clear, with the combination of work that will come to Barrow and to Rolls-Royce in Derby, that we anticipate that thousands of jobs will be created in the UK. As he will understand, I hesitate to put a precise number on that, but no one can pretend that this is other than a very positive narrative for defence and for employment in the UK.

He also raised the important issue of skills, which are critical for how we deliver on this trilateral partnership. Two things are happening: our industry partners themselves are being proactive in engaging in initiatives and programmes to encourage the enhancement of skills and retention of skilled personnel, but we have also established within MoD a defence nuclear enterprise, people and skills programme. That is to develop a sustainable and skilled workforce to support the defence nuclear programme. A range of activities is now being undertaken to increase the nuclear sector engagement with young people and to attract talent from a more diverse background. I think I can say that for young, aspiring STEM individuals who seek a really challenging career in a field in which they are interested, this must be near the top of the attraction stakes in what it offers.

The noble Lord raised the number of submarines, and I think I covered that in responding to the noble Lord, Lord Lee. The issue of cost was also raised, and of course costs are relevant. If we take that in a twofold manner, they are, first, the immediate costs that we anticipate will be necessary. We spent £2 billion last year in both Barrow and Derby. As the noble Lord will be aware, the recent announcement intends that part of the announced £5 billion—£3 billion—will be to sustain the nuclear enterprise. The £2 billion will run for a period of three years. That is devoted to the nuclear enterprise as well, excluding Dreadnought, which is of course covered by a separate contingency funding package with the Treasury.

On the International Atomic Energy Agency, the statement the director-general issued on Tuesday was helpful. I am sure the noble Lord has looked at it. It is a very full statement, but what struck me was that it would not have been possible for him to make that statement with its detailed content if there had not been the closest engagement with the trilateral partners in AUKUS. Of course, it is not a matter of saying that we look to the director-general to approve a project or to express support for it. This is an independent testing entity, and the job of the IAEA is objectively, professionally and completely neutrally to assess what we are doing, but it is perfectly clear from the level of engagement that there is a very positive relationship with the IAEA. That will continue. The noble Lord will be aware that its board meets regularly, and the director himself proposes to submit a report to the next session of the board of governors in June 2023.

On the wider issue of non-proliferation, again there is a very good story to tell. In the document—I feel a bit like a stage manager with props here—there is a particularly interesting section at page 33, which outlines Australia’s credentials and credibility in this field. It makes a very positive read. Australia has an extremely good record with the IAEA, which should provide reassurance and comfort. We also anticipate that, as this all progresses, all three partners will be regularly reporting to and engaging with the IAEA.

As to whether this could lead to more countries wanting to acquire nuclear-propelled submarines, it might very well do, but we all recognise the fundamental difference between a mode of propulsion and a nuclear-armed submarine, which is something entirely different. Therefore, all we ask is that, if other countries are minded to pursue that technology for propulsion, they too are vigilant about these important safeguards and criteria and the need to work closely with the IAEA.

The noble Lord also asked about collaboration under pillar 2. That is obviously slightly further into the future, but it is an exceedingly exciting part of the general programme. We anticipate that, as we make progress on pillar 1, which is to build the nuclear-powered submarines, that will remain a trilateral responsibility and will not be broadened out. As we learn from that process and begin to identify in these intricate sciences—whether it is hypersonics, cyber or whatever—we will certainly be open-minded about discussing with other interested parties how we might take these issues and who might be able to make a positive contribution. It is premature to make a more specific comment about that just now, but we can anticipate a very exciting potential for discussion on pillar 2 as we progress with the programme.

The noble Lord, Lord Coaker, and perhaps the noble Lord, Lord Lee, also raised resources and the 2.5% of GDP. I am very clear that that was a welcome announcement by the Chancellor, because I see it as much more than some roseate dream we might hope to deliver in future; I see it as a statement of intent. That is what the Government are minded to do, and it is contingent only on the economy’s ability to sustain it. Because of the manifest recognition by the Prime Minister, the Chancellor and the Government of the world of threat in which we live and the character of the geopolitical complexity that now surrounds us, noble Lords will understand that this is a very potent statement of intent and a very healthy indication that this Government are prepared, even in difficult economic times, to do the heavy lifting when it comes to the security of our country and our ability to contribute to global security through our alliances and partnerships.

I think I have managed to cover the points raised. If I have omitted anything, I undertake to write to noble Lords and have a look at Hansard.