Exchange of Naval Nuclear Propulsion Information Agreement

Lord West of Spithead Excerpts

Monday 17th January 2022 Grand Committee

[Lord West of Spithead (Lab)]

My Lords, I thank the noble Baroness, Lady Hayter, for tabling this Motion to take note of the Exchange of Naval Nuclear Propulsion Information Agreement. It was announced in a joint statement in September last year and immediately had strategic impact. Although China was not mentioned, the whole thrust of Australia’s decision to opt for nuclear vice conventional submarines was to counter the threats of China’s aggressive posture in the vast Indo- Pacific region.

China is, for example, building a military base on Vanuatu. Why is she doing that? She is building islands on reefs in the South China Sea and claiming ownership of the waters around it, contrary to international law; breaking agreements regarding Hong Kong; threatening Taiwan; and claiming the Japanese Senkaku Islands. One can add to this the impact of the belt and road initiative—China has, for example, now taken over the best deep-water port in Sri Lanka in the Indian Ocean, which we used to call Trincomalee, because Sri Lanka was not paying the money it owed—and its treatment of the Uighur population; it is quite apparent that China has no respect for the world order established post World War II.

Individual nations have little impact on what China does. She does not really care what each one of them is doing separately but, when they join together, she pays much more notice. There is no doubt that the Quad, which has already been talked about—the alliance between Australia, India, Japan and the USA—was something China did not like. We have seen that from a lot of things that have been said. AUKUS, the next alliance to confront China, also had an impact and was followed very shortly afterwards by the Japan-Australia agreement. Unsurprisingly, China reacted very negatively to the announcement of AUKUS, which confirms in my mind that we are going down the right route and that it was a good thing to do.

As noble Lords are aware—a number of speakers have mentioned it—this is about much more than a geopolitical move. AUKUS potentially comes with very lucrative defence and security opportunities for UK industry and opportunities within the scientific world, not just in submarine build but in lots of the other areas mentioned: cyber, artificial intelligence, quantum technologies and additional undersea capabilities.

Our American allies are taking this very seriously. Jim Miller, former Defense Under-Secretary, has been named to lead the US efforts on AUKUS. He reports directly to their national security adviser and has been tasked with designing an architecture for how the three countries will work more proactively on defence and share perspectives on the Indo-Pacific co-ordinating region. He will also co-ordinate, on a day-to-day basis, how defence, state diplomatic and other officials from all three countries will meet regularly to harmonise views and positions on the Indo-Pacific. Most importantly, the US has said that Miller will

“do whatever possible to provide the Royal Australian Navy with options to build nuclear submarines as rapidly as possible.”

Miller has 18 months to pull all that together. I ask the Minister: who in the UK is the point of contact for Mr Miller. Do we have a Mr Miller lookalike?

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[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

My Lords, the debate can now continue. I have agreed that if we have further votes, we will try not to take the full 10 minutes, if everyone has managed to vote electronically, so that we can proceed.

[Lord West of Spithead (Lab)]

My Lords, the United States has also established a US submarine advisory committee, which is advising the Australians on options. Can the Minister say whether we have anyone on that committee? What relationship does that advisory committee have with the US nuclear-powered submarine task force currently working with the UK to identify the best way for Australia to acquire a nuclear submarine fleet? I hope this is not a separate group doing separate work. We need to make sure this is all properly co-ordinated, otherwise we will find that we miss out on things. I am surprised that we have not established a post similar to Jim Miller’s post. Rather our national security adviser is pulling together all the strands from various departments such as the MoD, the FCDO, BEIS and others and is a very busy man. Surely we need to have someone who can focus full-time on this programme, or something will fall between the cracks and we will be outmanoeuvred by our great American friends, who are very good at doing business, and we will be caught out.

Picking the right design for the Royal Australian Navy’s nuclear-powered submarines is extraordinarily complex, and difficult choices will need to be made. There are two prime contenders: the Royal Navy’s Astute class and the US Navy’s Virginia-class Block V submarine or possibly the Astute successor or the Block VI Virginia-class which is going to replace the Block V. None of them will require refuelling. In answer to the question asked by the noble Lord, Lord Hannay, they will be provided straightaway with a core and a reactor that runs through their entire life.

Numerous issues will need to be considered, including fleet size, submarine service life, Australian defence self-reliance, Australian industry, content, design risks, size, crewing, payload delivery, sustainment of operations, training regimes, export controls and nuclear controls within Australia. It has been assessed that a critical mass of 10 Australian SSNs would be required to sustain sufficient certified personnel at sea and ashore and that it will be at least 15 years from now before there are enough qualified Australians to run even one nuclear submarine in a self-reliant manner. Provision of the boats will take even longer than that. This is highly complex and difficult to organise.

I believe that the Exchange of Naval Nuclear Propulsion Information Agreement should be welcomed with acclaim. It will help global stability because it will make the Chinese think and it will, I hope, give great opportunities to UK defence firms and science.

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[Baroness Goldie (Con)]

I wish to reassure my noble friend and the Committee that the spirit and intention of the Government is that scrutiny is important; it is at the heart of what they wish to see Parliament do, and it would be exceptional if scrutiny were denied. I hope that reassures my noble friend to some extent.

Moving on to the substance of AUKUS itself, it is a security and defence partnership between three like-minded, democratic allies to enhance security and stability in the Indo-Pacific region and globally. AUKUS is not a new treaty, it is not a mutual defence agreement, and it does not replace nor cut across other alliances, such as NATO or Five Eyes; it complements them and supports their aims.

As your Lordships will be aware, the main effort under AUKUS is the delivery of a nuclear-powered submarine capability to Australia. In September last year, an 18-month programme of work commenced to understand how we can best achieve this goal. I want to be clear that Australia asked for our help in acquiring a nuclear-powered submarine; we are meeting the request of a close partner with whom we have a long history of co-operation, including on submarines. Indeed, the noble Lord, Lord Bilimoria, spoke with authority on our long-standing United Kingdom/Australia relationship.

Our work to deliver this capability for Australia reflects the unique level of trust and co-operation between our three countries, and we can rightly be proud of that. This will help Australia to fulfil its defence and security responsibilities and to promote stability and security in the region, which this Government strongly support. As your Lordships will be aware, we have built and operated a world-class nuclear-powered submarine capability for more than 60 years. We bring deep expertise and experience to this partnership, as indeed do our American allies. AUKUS showcases the UK’s competitive and innovative defence industry and our role as a global leader in science and technology.

I emphasise, because a number of your Lordships alluded to this, that the programme of work will be fully in line with our international obligations. Australia has impeccable non-proliferation credentials, and it does not, and will not, seek nuclear weapons. It is important to reiterate that the proposed submarines will use a nuclear reactor uniquely as a power source. All three partners take their obligations under the nuclear non-proliferation treaty extremely seriously and have been in regular close contact with the International Atomic Energy Agency as this agreement moves forward into the next stage.

Let me try to deal with some specific points that arose during the debate. My noble friend Lord Lansley raised the Japan-Australia Reciprocal Access Agreement. We enjoy a close and growing bilateral security relationship with Japan. AUKUS does not replace or reduce the importance of any other strands of our relationship with Japan. Instead, through AUKUS, we intend to deepen, not limit, co-operation in the Indo-Pacific region. The Japan-Australia Reciprocal Access Agreement is for these Governments to comment on, but is a sign of their developing strategic partnership.

The noble Baronesses, Lady Liddell and Lady Smith, raised the transfer of intellectual property. The agreement provides protection for the originating parties under Article VIII. As part of the ongoing programme of work, we will further consider how to deal with the exchange of intellectual property.

The noble Baronesses, Lady Hayter and Lady Smith, the noble Lord, Lord Hannay, and my noble friend Lady McIntosh raised the important issue of international relations, not least with France, Europe and China. We fully recognise the French disappointment. We are keen to move forward and are keeping channels of communication open. As the Prime Minister said to President Macron, we are committed to the United Kingdom-France relationship and we believe in the powerful role we can play together.

France is an important partner to the United Kingdom. We have a long-standing security and defence relationship with France that is underpinned by the Lancaster House treaties and by us being close NATO allies. We continue to consult each other daily on international defence and security matters, and that defence relationship remains strong. As was recently illustrated, our close collaboration on Afghanistan and our military deployments in the Sahel to tackle terrorism indicate that we are working together and consulting each other, just as we are working together to tackle global challenges such as climate change.

The noble Baroness, Lady Hayter, and the noble Lord, Lord Hannay, focused particularly on China. I make clear that AUKUS is not aimed at a specific country; it is about supporting our allies and promoting stability in the Indo-Pacific region. AUKUS will work to protect our people and support a peaceful and rules-based international order. It is about the long-standing and deepening defence and security relationship between the United Kingdom, Australia and the United States.

The noble Baronesses, Lady Hayter, Lady Liddell and Lady Smith, and the noble Lord, Lord Bilimoria, specifically raised Five Eyes. That remains a unique and highly valued partnership. We have been sharing intelligence to address global threats and support international security and stability for over 60 years. We noted that Prime Minister Ardern of New Zealand welcomed the increased engagement of the United Kingdom and United States in the region. We compare notes and work together as five like-minded countries on a range of issues and in a variety of formats. Of course, each of us also has its independent foreign policy and works with different partners and in different groupings, according to context and need.

My noble friend Lady McIntosh asked about devolution. In this context, defence and foreign affairs are matters reserved for the Westminster Government, so there is no specific devolved locus on this matter. When the MoD receives inquiries from representatives of constituencies in the devolved nations or from the devolved Governments, we respond and always do our best to co-operate and be helpful.

The noble Lord, Lord Hannay, particularly raised the nuclear aspect to this and the responsibilities of the United Kingdom, United States and Australia. I give the reassurance that we want to reinforce the global non-proliferation architecture and set a precedent for the future that retains confidence in the fulfilment of our NPT obligations. We regularly update the International Atomic Energy Agency and are fully engaging with it throughout the 18-month feasibility study. We will continue to be transparent and consultative, especially on issues regarding nuclear materials, facilities and activities relevant to the IAEA.

The noble Lords, Lord Hannay and Lord Bilimoria, were interested in the inherent character of this new security partnership. That is what it is. I think they were seeking clarification and reassurance. This is a partnership focused on joint capability development and technology sharing. It reflects the unique level of trust and co-operation between the UK, the United States and Australia. It is about nuclear propulsion, not nuclear weapons and, very specifically, it does not include any obligation to consider an attack upon one as an attack against all participating states. That is not the character of this agreement.

The noble Lord, Lord West, sought detail about specific representation on various groups within the UK, the United States and Australia. I do not have specific information to that level, but I shall investigate, and if I am able to share information with him, I shall do so.

[Lord West of Spithead (Lab)]

My other question relates to the fact that the Americans have nominated a very high-ranking person to drive this programme. It seems that we are allowing our National Security Adviser, who is responsible for all sorts of things, to do it. As we know, because of the sheer complexity of this and the impact it might have on our CASD, our nuclear programme and all the other things, having one person to whom we can say, “Right, this is your job. You’re responsible to the National Security Adviser and the Prime Minister, and if it goes wrong, it’s your head that gets chopped off” is the sort of thing we need rather than leaving it quite so loose. Are we going to do that?

[Baroness Goldie (Con)]

I am grateful to the noble Lord for expanding on that. As I said, I do not have specific information and I would not want to mislead him by giving him some general position that may be completely inadequate. I undertake to go back, inquire and share with the noble Lord whatever information it is possible for me to disclose.

The noble and gallant Lords, Lord Houghton and Lord Boyce, raised legitimate and understandable concerns about how all this impacts on our nuclear submarine-building programme and whether it puts any of it in jeopardy. In relation to Dreadnought, I want to make it clear that the programme remains on track to deliver to schedule and within the original budget as provided for in the strategic defence and security review in 2015. The noble Baroness, Lady Smith, asked about the overall budget situation. I gently remind her that the defence budget settlement which we saw last year is one of the most generous that we have seen in generations. That has been recognised widely and within the defence community.

In relation to Astute submarines, which, again, the noble and gallant Lords, Lord Houghton and Lord Boyce, were interested in, my understanding is that they are making good progress and that they are all committed to be delivered by 2026.

The noble and gallant Lord, Lord Boyce, also raised the 1958 agreement regarding nuclear weapons. He also mentioned other historical agreements which focused on nuclear weapons. I remind the Committee that AUKUS is commencing a programme of work to identify ways to deliver a nuclear-powered but not armed submarine capability to the Royal Australian Navy. That is a gentle reminder that we are dealing with matters of nuclear propulsion under this agreement.

The noble Baroness, Lady Liddell, wished to understand how all this relates to the Five Eyes defence alliance. Let me reassure her that that is first and foremost a highly valued intelligence-sharing partnership. Over the years, it has grown beyond intelligence sharing to respond to changing threats and challenges. AUKUS is an enhanced trilateral security partnership with a specific remit. Both as individual Five Eyes nations and as a group, we will continue to work with other like-minded allies, forming the right alliances to better face specific common challenges.

The noble Baroness was also interested in how AUKUS contributes to the United Kingdom’s Indo-Pacific strategy—forgive me for sounding hoarse; as far as I am aware, I have nothing infectious, and I tested this morning before coming to mix with you all.

[Lord West of Spithead (Lab)]

A likely tale.

[Baroness Goldie (Con)]

It would have been difficult for the noble Lord to corroborate it; I was doing it in the privacy of my bedroom.

AUKUS is a concrete demonstration of the commitment made by the UK in the integrated review to deepen co-operation, partnerships and engagement in the Indo-Pacific. We are committed to deepening relationships with countries in that region. By 2030, the region will represent more than 40% of global GDP, so the announcement is a clear demonstration of both our interest in and commitment to that area.

The noble Baroness, Lady Smith, said, “Well, this is all fine and well, and we understand what it means for the Indo-Pacific area, but what about everything else in defence?” I say to her that if we take in conjunction the integrated review and the recent defence Command Paper, not to mention the recent Future Soldier paper which was the subject of a Statement in the Chamber, we see in all of those, detailed information on how we meet threat, wherever that is coming from, whether it is directed at us within the UK or at our partners and allies. We have a clear plan as to how we think we should meet that, and it is a plan that will endure in the forthcoming decades.

This is an important agreement for Australia, the United States and the United Kingdom, as it is for the wider issues of stability in the region. The noble Lord, Lord West, commented both shrewdly and authoritatively on those issues. The agreement certainly reflects the importance we attach to the area in terms of the integrated review—that was also recognised by my noble friend Lord Lansley.