Motion to Take Note
That the Grand Committee takes note of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland, the Government of Australia and the Government of the United States of America for the Exchange of Naval Nuclear Propulsion Information, laid before the House on 29 November 2021.
Relevant document: 14th Report of the International Agreements Committee (special attention drawn by the report)
My Lords, I am delighted to open this debate. In doing so, I thank my colleagues on the International Agreements Committee—particularly my noble friend Lady Liddell and the noble Lord, Lord Lansley, from whom we will hear shortly—together with our officials for their superlative efforts in turning round our report, which was published on Thursday, so that we could bring this agreement to the attention of the Committee and so provide the only opportunity for the Lords to consider this significant agreement prior to ratification.
The treaty in front of us may represent only a start. It is a legally binding framework for the exchange of sensitive information on nuclear propulsion between the three nations over a preparatory 18 months. However, there is no doubt that this three-way commitment providing for nuclear-propelled Australian submarines is of considerable strategic significance, with implications for our approach to the Indo-Pacific region and China. We look forward to the noble Baroness, Lady Goldie, setting out of the context in which this treaty, and the subsequent co-operation on submarines et cetera, falls. This is particularly pertinent given that the announcement of the trilateral pact was somewhat unexpected and had not been trailed in earlier discussions.
I will leave it to others, particularly the noble Lord, Lord Hannay, to comment on the response AUKUS received in France. We know that the Chinese described it as “extremely irresponsible” and representing a “Cold War mentality”, whereas Japan gave it a warm welcome.
Australia is the second-largest arms importer in the world. We will no doubt be hoping to boost our sales there, which might mitigate some of the fears that our farmers have about the Australian free trade agreement. Can the Minister outline the economic benefits that the Government think will flow from the agreement and indicate whether she envisages any other benefits, such as helping our efforts to renew Trident through support for relevant industries?
However, our involvement is not simply about arms sales, and nor does it include any military role. Rather, as Chatham House opined, AUKUS is a wider political response to “China’s growing hard power”. That is why the International Agreements Committee wanted the political scene to be properly set out by the Government before the treaty is ratified. When she replies, can the Minister touch on the Government’s assessment of the agreement’s impact on international relations, particularly with France, China and the Pacific region, as well as its effect on the Five Eyes intelligence-sharing agreement between the US, the UK, Canada, Australia and New Zealand? Can she also clarify what engagement will take place with the International Atomic Energy Agency, which I assume will be led by Australia?
I am deliberately leaving well alone the naval uses and potential of this initiative, given the expertise that we will shortly hear from the noble and gallant Lord, Lord Boyce, whose intimate knowledge of the inside of a submarine is surpassed by few others, let alone his wider defence knowledge; from my noble friend Lord West of Spithead, whose very title is testimony to his special interest—no one who has sat in our Chamber during Oral Questions can ever have doubted that; and from the noble and gallant Lord, Lord Houghton of Richmond, who may be a landlubber, but who has similarly wide and deep defence expertise.
We welcome sight of this treaty, although there are shortcomings in what has been shared with Parliament, including, yet again, the failure to spell out how and when any amendments to it would be subject to parliamentary scrutiny. For its part, our equivalent committee in the Australian Parliament has noted that any such amendments to the treaty would be subject to its usual treaty scrutiny processes. We ask for nothing less. Furthermore, given the importance of the wider agreement, and given that follow-on agreements will probably be necessary, such ongoing and future scrutiny will be vital.
That same Australian Joint Standing Committee on Treaties is clear, for its part, that:
“Any transfers of equipment, materials or technology that follow would be the subject of a subsequent agreement and further Committee scrutiny.”
Can the Minister therefore confirm that any amendments to this treaty and any follow-up treaties will be laid under CRaG? Furthermore, we do slightly wonder whether everything already agreed has been fully shared with us. So perhaps the Minister could indicate whether we do have all the underlying documents, or whether there are any separate MoUs which have not yet been disclosed to Parliament. Could she also confirm that all future agreements in relation to AUKUS, either by treaty or significant MoU, will be shared with Parliament? I beg to move.
My Lords, as a member of the International Agreements Committee I am very pleased to have this opportunity to follow our Chair, the noble Baroness, Lady Hayter of Kentish Town. I very much look forward to this debate, which will include several expert contributions that will be of particular value to the House, not only now, in the process of scrutinising this agreement, but perhaps more particularly in setting the scene for the engagement between the three parties to this agreement and the agreements to follow.
If I may, I will reinforce the point that our Chair made. The committee’s report essentially welcomes the agreement; we simply make one point that seems to have been taken for granted, as she said, by the Australian treaties committee: that further agreements and amendments to this agreement will be subject to further scrutiny. It literally said: “any action will be subject to further scrutiny”. If that is the case for the Australian Parliament, clearly, it should also be the case for this Parliament, and I hope that my noble friend the Minister will be able to make that simple and straight- forward commitment.
There is intended to be considerable follow-up activity on the agreement, so the substance of it is not so great that we can debate many details now. It is intended to initiate a wider co-operation not only on nuclear-powered propulsion systems for submarines but on areas of cyberwarfare, AI, quantum technologies and undersea technologies generally. I hope that today, we will hear a bit more about what the scope of that collaboration may look like.
May I say to my noble friend that I thought the agreement immensely encouraging in several respects? First, at the simple, mundane, practical level, it is encouraging that Governments in this day and age were able to negotiate something of a strategic and significant character, for several months and with deep engagement, with nobody leaking it. That is fantastic. We arrived at 15 September, and everybody was surprised, including the French. It is to the Government’s credit that they were able to do that.
Secondly, there seems to have been a particular skill on the part of the British Government in being right at the heart of this strategic negotiation, yet the French Government blamed Washington and Canberra and seemed not to blame London to the same extent and did not withdraw their ambassadors. The UK strategic engagement was central. Unless I am very much mistaken, the report suggests that the initial conversations were between the Royal Australian Navy and the Royal Navy, so in a sense, the initiation of this agreement may have rested in the hands of the British Government rather than necessarily with the Australian Government —but that is only what I have read in reports.
However it came about—this is the most important point on which to applaud the Government’s agreement—we often hear about an Indo-Pacific tilt and the necessity of taking realistic and tough measures to counter the longer-term risks associated with Chinese aggrandisement and, here, for once, we are actually seeing something happening that is concrete, substantial and potentially of great significance. Certainly, it is a step change in the Australian defence capability, as a former Australian Defence Minister said. It also seems that it has not only important defence implications but very strong and positive geopolitical implications.
In our committee, we considered questions relating to the arguments about the nuclear proliferation treaty. It is clear that this is not a breach of any of the treaty obligations on the part of any of the participants in the agreement; nor can one realistically—as some have attempted to do—suggest that it somehow opens the door to the transfer of nuclear-powered propulsion technology to other countries. Other countries, such as South Korea, may wish to acquire it, but it has taken several decades for the Americans to agree to any further sharing beyond Great Britain. The White House briefing on the day of the launch was perfectly clear that they saw this as a one-off and they would not regard it as offering any precedent for any other country to be able to ask for the same thing. So, to that extent, we felt sure that we saw no need to express any reservations in that territory.
I should declare an interest as the UK chair of the UK-Japan 21st Century Group. It is interesting that, not only do we now have the Quad—which the noble Lord, Lord Bilimoria, may wish to say a bit more about, including on the progress that has been made in mutual understanding and assistance—but shortly after this agreement the Japanese Government entered into a reciprocal assistance agreement with the Government of Australia, which is only their second such agreement. The Japanese Government have made it clear that they would view positively the prospect of a further agreement of a similar character with the United Kingdom.
I know it is probably not within my noble friend’s brief to respond on that point today, but if she were able to write to me about it, I would be very interested to read it, following the increase in mutual assistance with Japan—not only literally troops on the ground and aircraft deployed for training purposes in Japan, but the visit of the “Queen Elizabeth” and other vessels. There are a lot of possibilities for extending our UK/Japanese defence collaboration to the form of an agreement such as that entered into with Australia.
Finally, I wish to reinforce a particular point that our chair made about the industrial and economic benefits in the United Kingdom. It was reported shortly after this agreement was signed that the British Government entered into a contract for early design work on a new nuclear-powered hunter-killer submarine for the Royal Navy with BAE Systems and Rolls-Royce. Can my noble friend say any more about that and how it might position the United Kingdom’s defence industry in relation to work on the Australian submarine fleet, in circumstances where it is reported that the American defence capability is fully occupied in meeting its own requirements?
In all those respects, this seems to me to be a very positive agreement. It is very useful for us at this stage to note some of the potential and to encourage the Government in directions in which they seem very willing and able to go.
My Lords, I should at the outset make it clear that I welcome the agreement by the US and the UK to make naval nuclear propulsion information available to Australia, one of our oldest and most valuable allies. A step such as this, which will substantially enhance the deterrent capacity of an ally in a sensitive and strategically important region of the world where tensions and challenges are on the rise, makes good sense. When the dust has settled, one hopes that all western allies that have a stake in the security of Indo-Pacific region—including France, however much it was justifiably affronted by the way the announcement of this agreement was handled—will recognise that we all collectively have much to gain from Australia’s increased naval capability.
As to the announcement of the agreement, there, I am afraid, the positive tone changes. That was a travesty of diplomacy. In future years, I suspect this episode will be taught at diplomatic academies across the world as how quite unnecessarily to lose both friends and influence. Why did the Prime Minister think it was sensible to rub salt in French wounds by insulting President Macron with some ill-chosen Franglais, in sharp contrast to President Biden’s willingness to offer an apology and seek to put hard feeling behind us? Are we so pre-eminent in world affairs that we can hope to get away unscathed with that kind of performance? Perhaps the Minister can use the opportunity of replying to this debate to match President Biden’s example. I would greatly welcome it if she did.
Some important questions remain to be answered about the agreement, and I hope the Minister will be able to respond to them. Here are three. First, is this agreement in no sense a defence pact or treaty with objectives and obligations similar to those in the Atlantic alliance? I ask that because a great deal of the press comment has been extraordinarily wide of the mark, as I understand it. The words “pact”, “mutual defence treaty” and so on are thrown around, and it would be a great help if the Minister could correct that—if I am right in thinking that it needs correcting. I hope the answer is no, since I do not think that this is the moment to revive those Cold War relics SEATO and CENTO. To do so would risk opening up rifts in what we must hope will be the widest possible involvement of countries in the Indo-Pacific region, working together to deter any possible Chinese attempt to extend its sphere of influence. I doubt very much whether India, Japan, South Korea or even New Zealand would contemplate joining such a mutual defence organisation, and we surely do not want to slip into new a Cold War mentality when the solution of so many of the world’s problems, such as those relating to climate change, health, trade and nuclear non-proliferation, necessitate working with China.
Secondly, will Australia, a non-nuclear member state under the nuclear non-proliferation treaty, be negotiating suitable safeguards with the International Atomic Energy Agency to ensure that there are no proliferation risks from this exchange of information? Will that be a condition of supply?
Thirdly, would it be preferable if any technology transfer to Australia—here I speak about something that, I imagine, might not take place for some time, while design and competition between us and the United States take places—takes the form of propulsion units that will not require replenishment during the life of the submarine in question? That would thus avoid the greatest risk of fissionable material, in the form of high enriched uranium, getting into the wrong hands. It would be very useful if the noble Baroness addressed those three questions. I hope her replies strengthen my welcome for this agreement.
I too congratulate the noble Baroness, Lady Hayter, and the committee for the work they have done and for creating the opportunity to debate this issue and the agreement before us. Like the noble Lord, Lord Hannay, I welcome it. As the noble Baroness, Lady Hayter, said, it is particularly welcome as this is a new agreement that covers an area for which there has never been this opportunity before—namely, the Indo-Pacific waters. I hope it presages and prefaces more interplay between the parties involved.
Like the noble Lord, Lord Hannay, I also express my regret at the lapse in diplomatic judgment that led to France being left out in the cold. I say this simply because I have never represented a part of the south; I have always represented parts of either the north or the east of England. But I am mindful that we are extremely dependent on France at the moment regarding the number of migrants who come to this country. Noble Lords must ask ourselves how prepared we would be, if the roles were reversed and this was happening to us, to police our waters and stop migrants coming over. I just leave my noble friend with that thought. I would be grateful for her views on the way the situation was handled with France and if things could have been done in a more diplomatic way. We did not need to offend them.
I echo the concern raised by the noble Baroness in introducing the report regarding paragraph 16 and amendments to the agreement being subject to parliamentary scrutiny. The Minister served in the Scottish Parliament with some distinction and is only too aware of the interest the Scottish nation has in this form of nuclear deterrent. What procedure is envisaged to discuss and debate these amendments with the assemblies of the devolved nations, in particular the Scottish Parliament?
In introducing the report, the noble Baroness said that it was hoped that the agreement would run for 18 months. Can the Minister confirm that? The very useful note provided by the Library in preparation for today says that the agreement will stay in force until 31 December 2023, but it does not say when it will come into force or when all three partner countries will have completed their respective internal procedures to ratify international agreements. I fully accept that it is extremely important that we share the naval nuclear propulsion information that lies at the heart of the agreement, which is why I warmly welcome the agreement before us.
I hope that my noble friend and the Committee will permit me to raise one issue which is even more of a threat at the moment, and which we briefly debated two weeks ago when we discussed an international agreement similar to this one, albeit with Ukraine. I am delighted to say that my noble friend Lord Grimstone has written to us answering a number of questions that were raised then in relation to cyberattacks, which have been identified by the Government as being of great concern. The one causing particular concern was that on Ukraine, which took out a number of Ukrainian Government websites and was presumably committed by a hostile state, in this case Russia.
As is clearly stated on the government website, we have seen an increase in the number of such attacks in this country through 2021, and I welcome the National Cyber Strategy, which the Government published in December 2021. However, that would be even more helpful if it contained some specific advice on how a company might respond if it was in the midst of a cyberattack and on what government resources would be made available to address the increasing number of such cyberattacks on companies. I read with interest that for most of those that have taken place to date, against government bodies either in mainland Britain or in Northern Ireland, no ransom has been paid. It is a matter of record that the clothing company, FatFace, paid a ransom of £2 million to recover its systems. The cyberattack with which I was involved led to a ransom of more than £100,000 being paid. All I could find on cyberattacks was the following statement on the National Cyber Security Centre website:
“Law enforcement do not encourage, endorse, nor condone the payment of ransom demands. If you do pay the ransom … there is no guarantee that you will get access to your data or computer … your computer will still be infected … you will be paying criminal groups … you’re more likely to be targeted in the future.”
I do not believe that this advice goes far enough. If a company is in the midst of a cyberattack which has shut down its systems and if it is not given any help by the Government, the only option it has is to pay the ransom money. There is no doubt that the two cyberattacks that I referred to came from a third state, a hostile state, believed to be Russia. I would draw the conclusion that the moneys raised, the £2 million from FatFace and the more than £100,000 paid recently in bitcoins by the company in North Yorkshire, will go to fuel the troops on the Ukrainian and other borders.
Will the Minister comment on how we are going to meet such cyberattacks going forward?
My Lords, as the UK redefines its role in the world, it must remain globally competitive, dynamic and outward facing. The key foreign policy strategy for that is the integrated review which we launched on 16 March last year.
As president of the CBI, I know that business welcomed the importance placed on relations with key growth markets to boost business confidence, along with a balanced approach to China as outlined in the review. AUKUS is an example of this strategy in action; it is an acknowledgment that the key battlegrounds will not be in the industries of old but in industries of the future, including nuclear, and having this agreement shows that the UK is going to collaborate to ensure that we have the competitive advantage to offer the world.
Unless the West steps up and collaborates, it leaves China and others to fill the void. China accelerated its CPTPP accession plans and made formal announcements to that effect just days after the AUKUS pact announcement. That was not unrelated.
China is very competitive in some of the industries of the future, leading the world on AI and autonomous vehicles, but we in the UK also have significant strengths and services—also in AI—with innovation spinning out of our best of the best universities in the world, including on things like graphene. There is an important dynamic on standards and rules of the future across many of these technologies and industries, and the UK should be at the forefront of leading and convening those dialogues. We should be the key interlocutor bridging different views. We had the G7 summit last year, which we hosted and led, and we have the G20 in Indonesia next year. These are key moments, and these collaborations can really create a global leadership role for the UK promoting multilateralism and partnership, ideally rooted in human rights and the rule of law. These are the types of values we hold dear in our economy.
The integrated review of global Britain in a competitive age—looking at security, defence, development and foreign policy—was the first time that such a review was created and was a comprehensive articulation of our security and international policy, taking into account sovereignty, security, prosperity, democracy and a commitment to human rights, the rule of law, freedom of speech and faith and equality. It is a far cry from the 2015 SDSR, and let us not even get started on the 2010 SDSR—I see red when I remember it—which decimated our Armed Forces and was the worst in our history. Thank God we have moved on from that.
This integrated review sets out a vision for global Britain: our openness as a source of prosperity; a more robust position on security and resilience; a renewed commitment to the UK as a force for good in the world; increased determination to seek multilateral solutions to challenges such as climate change. AUKUS is a multilateral solution as well, which stresses the importance of deepening our relationship with our allies and partners in the world. The integrated review has four overarching objectives. The first is sustaining strategic advantage through science and technology—AUKUS ticks that box. The second is shaping the open international order of the future—AUKUS ticks that box. The third is strengthening security and defence at home and overseas with allies and partners to help maximise the benefits of openness and protect our people from growing threats—AUKUS ticks that box. The fourth is building resilience at home and overseas—AUKUS ticks that box. The integrated review and AUKUS therefore go hand in hand.
I thank the noble Baroness, Lady Hayter, and her committee for all their work. The deal that the Australian, United States and UK Governments signed in September is a joint statement creating a trilateral agreement. This is of course on top of the existing Five Eyes, involving Australia, Canada, New Zealand, the United States and the UK. People forget that the origins of the Five Eyes go back—if I am not mistaken—to 1941. It is a solid relationship that we have together. This time, with AUKUS, it is about the acquisition of nuclear-powered submarines and the resulting co-operation. We also have, as the noble Lord, Lord Lansley, mentioned, the Quad agreement between Japan, Australia, the UK and India, which is also a very strong agreement and has a lot of potential. Also, just last week, we signed the start of the negotiations on the UK-India free trade agreement, which will be one of our most important free trade agreements going forward. The negotiations will, we hope, carry on throughout this year.
There are some points to note. AUKUS is the Exchange of Naval Nuclear Propulsion Information Agreement, and the Royal Australian Navy will be able to safeguard the peace and security in the region as a result. This will be in a scoping phase for 18 months, but have the Government taken into account the Australian elections coming up some time between March and May? Will this deal survive a change of government? We do not know if there will be a change, but have our Government considered the implications of this?
Before concluding, I just want to touch on the House of Commons debate on the Command Paper, which was also relevant to this. Of course, the Army will go down to 72,500 people by 2025. I find this really concerning. Our Armed Forces, including our Army—the boots on the ground—need to have a critical mass. We talk about the Army not filling Wembley Stadium; 72,500 is way below filling it. When my father, General Bilimoria, commanded the Central Command in India, it was made up of 350,000 troops, so this is a matter of concern.
This new partnership has huge implications and has been well received. The UK National Security Adviser, Sir Stephen Lovegrove, said that the submarine element of the partnership is
“perhaps the most significant capability collaboration anywhere in the world in the past six decades.”
There is also the potential for lucrative defence and security opportunities for UK industry, not just in submarine-building but in other areas that the noble Baroness, Lady McIntosh, spoke about, such as cybersecurity, artificial intelligence and quantum technology. One of the CBI’s largest members is BAE Systems, which is chaired by one of my predecessors as president of the CBI, Sir Roger Carr, and has as a board member Dame Carolyn Fairbairn, the former director-general of the CBI.
So this partnership could be very good news for companies like BAE Systems. However—this point is important—the tilt in the Indo-Pacific is very important. We must not forget what is on our doorsteps with Europe. What is happening in Ukraine, in front of our eyes, is crucial. This is not an either/or; it is an “and”—that is, both Europe on our doorstep and the Indo-Pacific. Of course, the Australian Prime Minister has said that one of the key drivers of the agreement is the growing security challenge in the Indo-Pacific; we will address it as well.
There is another point that the Government must take into account, and this does not involve the transfer of nuclear weapons to Australia. AUKUS does not contravene the nuclear non-proliferation agreement, but there is a concern because New Zealand has said that it will not allow these nuclear-powered submarines into its territorial waters. What will the effect on Five Eyes be? None, I hope, but it is something to be considered.
On 16 December—or 17 December, depending on whether you are in the UK or Australia—we signed the UK-Australia Free Trade Agreement. I was privileged to play a part in helping with the agreement throughout, alongside the Australian Minister for Trade, Dan Tehan, and our Secretary of State for International Trade, Anne-Marie Trevelyan. It is the most comprehensive and modern free trade agreement in the world. The main part of it was negotiated in 365 days. It is duty-free and tariff-free. It covers goods, services, mobility, youth mobility, digital, SMEs, agriculture, innovation, climate change and the environment. The good news is, having signed it, the next step is accession to the CPTPP, and Dan Tehan is the vice-chairman of the accession committee. Hopefully, this year, we will join the CPTPP, which is made up of 11 countries and represents more than £110 billion of trade for us. That will be very good news.
We have the integrated review, AUKUS, the UK- Australia Free Trade Agreement and Five Eyes; and soon, we will have the CPTPP. Trade and security, hand in hand, will be intertwined, not as a thread between the UK and Australia but as a solid rope all the way through.
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?
Sitting suspended for a Division in the House.
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.
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.
I thank the noble Baroness, Lady Hayter, for the opportunity for this short debate. I reassure her that, although I am a landlubber, the importance of the nuclear enterprise transcends single service interests. Indeed, in common with most former defence chiefs, I maintain a close interest in the nation’s nuclear enterprise. This is not always easy since many of the Government’s formal publications and announcements on nuclear issues, such as last October’s annual update to Parliament, are, perhaps by design, somewhat opaque.
A consistent set of features of the nuclear enterprise is, however, clearly discernible. The enterprise is vital, expensive, fragile and, wholly understandably, beset with various risks. One area of that risk is the future propulsion system of our nuclear submarines, and one category of that fragility is the quality and future availability of suitably qualified nuclear personnel. The fragility is fully recognised, though it is, to be honest, far less obvious that it is being successfully ameliorated.
The recently announced AUKUS agreement is in many respects hugely welcome, as we have heard. It aligns the interests of three like-minded Governments in an increasingly important part of the world and against a commonly agreed threat. The genesis of agreement, however, is less obvious. It appears, anecdotally, to have been the opportunistic exploitation of a military-to-military inquiry about the challenges of adopting nuclear propulsion in a submarine enterprise. It certainly does not seem to be an initiative that spent years of cautious marinading in policy consideration. Rather, it was an opportunity to give substance to rhetoric. There may well be nothing wrong in that at all, but my concern is that a major foreign policy initiative that necessitates any dilution of the UK national effort, any diversion of our nuclear expertise or anything that has the potential to add fragility or risk to our own nuclear enterprise must be contemplated and embarked upon with extreme caution. I would welcome the Minister’s assurance that this risk is fully recognised and will be properly ameliorated.
My Lords, it seems a bit strange that we all recognise how important this agreement is—it is extremely important—but that this is the only opportunity, in this room today, to scrutinise it in detail. I support it, as indeed do all noble Lords who have spoken this afternoon, but there are parts of it that we really need to dig a little deeper into. I have some questions. I know the Minister is very helpful, but some of the issues raised by the International Agreements Committee are about the explanatory memoranda produced with these treaties, and we need to know the detail. We cannot have just a broad sweep, which is what has been happening. Some of the questions that I wish to ask look at the detail of the agreement.
I accept that we are all new to this process of examining trade deals but, if we look at the joint standing committee on trade in the Australian Parliament, there is a process that allows parliamentarians access to much greater detail than we have had—not just on this deal but on other deals. I would recommend to the Government that we work hard at this to get it right. We now have a process of 18 months as part of this agreement, and it is very important that we have a hard-headed look at some of the aspects in it.
The noble Lord, Lord Bilimoria, spoke in some detail about the Five Eyes agreement. Were the Five Eyes nations informed in advance that this was going to happen? One reason why I ask that is the point that has already been made: that New Zealand has already stated that it will not allow nuclear-propelled vessels into its waters. If that has not been referred to them in advance, we have put them at a disadvantage, as we have Canada. Does this weaken the Five Eyes agreement? I hope that it does not because it is a very important agreement for our security.
One other area where I have not found any advice or information is about the South Pacific Nuclear Free Zone Treaty. Where does that kick in? What about the whole area of making sure that we work with our allies across the board? Could we be enlightened on the wider context of policy—this has been said by others—towards the Indo-Pacific region and China? That is very much on our minds, given the advice that we were offered last week about the interest that China is taking in this Parliament.
I am sorry to pose such a long list of questions, but part of that is because of the paucity of advice in the Explanatory Memorandum. This is a large-scale defence deal put together in great secrecy and handled in a rather ham-fisted way—the noble Lord, Lord Hannay, being a much more distinguished diplomat than me, calls it a travesty of diplomacy. The way in which it has been handled with France has been awful; France has been done out of a $90 billion contract for conventional submarines. No one seems to have taken into account that France has a considerable interest in the Pacific region. There are about 1.6 million French citizens in, for example, New Caledonia and French Polynesia, and the French already have a defence strategy based on the region. It seems bizarre not to have taken them into account in the run-up to the treaty. The Times very funnily pointed out that the way in which the treaty had been handled was like something out of a John Le Carré novel, which is a bit unfortunate if we are trying to position ourselves as being ready for the kind of complex agreements that we are talking about.
Australia has its own shipbuilding industry with strong links with the UK. Given the lack of information on how disagreements will be handled, as my noble friend Lady Hayter pointed out, can we assume that intellectual property is part of the deal? Where are the constraints on intellectual property? That will become quite important. As I said in the debate last week, I live close to some of the big shipyards that are involved in defence. If we look in detail at this agreement, it could mean that a lot of the shipbuilding that we do in the United Kingdom goes elsewhere. If it helps security, fair enough, but there are still big questions that need to be answered, and the answers are not in either the agreement or the memorandum.
Can any one of the partners walk away? It would be very helpful if the Minister could enlighten us about how any disagreements can be settled because there does not seem to be any dispute settlement mechanism, as stated in Article X. Similarly, there seems to be no mechanism for amendments to the treaty. Of great significance to this House, I would like to know the arrangements for continuing parliamentary scrutiny of this treaty and other treaties associated with it because we are talking about a mechanism that facilitates any further transfer of information and expertise.
Moving to a nuclear-powered fleet, rather than a diesel-powered one, in Australia cannot be put down to a desire to reduce carbon emissions. As we saw at COP 26, the present Government of Australia is pretty much in the hands of climate sceptics, so we cannot use that kind of argument.
The noble Lords, Lord Lansley and Lord Bilimoria, referred to the Quad and the role that India plays in it. Has it been informed of the thinking behind this treaty? Was it informed before the treaty was announced or is it trying to catch up, just like everybody else?
Some of these questions could have been answered in the Explanatory Memorandum but they are not. It is worrying that this debate is the only opportunity for scrutiny of the treaty. I encourage the Government to think again about how they handle it, look at the Australian example of the Joint Statutory Committee and see whether we can come to an arrangement that keeps us all on the one side when important treaties, such as this one, are going through.
My Lords, I agree with and support in principle the agreement we are debating. It will strengthen our strategic position in the Indo-Pacific and help to bolster our relationship with the Five Power Defence Arrangements, which is, in my view, necessary in the light of China’s increasing assertiveness in the region. It will also bring us closer to the Quad, which has been mentioned two or three times this afternoon, and is an alliance with which we should become more closely associated.
En passant, this initiative is extraordinarily ambitious for Australia. One has to wonder whether it has truly assessed the huge cost of nuclear ownership, even if the submarines are not built in Australia. I worry that we are going to invest a massive amount of time and capital that we can ill afford only to find somewhere down the line that Australia has deemed the project unaffordable. However, I hope this will become apparent —or not—in the early stages of the studies that are under way.
Notwithstanding my broad support, none the less, I have some reservations about where this agreement might take us. I note that some commentators have said:
“AUKUS does not over-extend Britain”
“There is no military commitment involved in the agreement.”
Well, that all depends on how you define “military commitment”. Clearly we will not be in some sort of Article 5-type situation, but I am quite sure that there will be a drain on our military resources in terms of people and equipment as this project ramps up and thereafter as the Australian submarines achieve operationality.
This presents me with a major concern. I realise that this agreement does not provide for the transfer of naval nuclear propulsion equipment. As the Explanatory Memorandum explains, following the conclusions of the 18-month scoping programme,
“a follow-on agreement would be put in place to support such transfers as needed to then deliver the submarine capability to Australia.”
Our submarine-building programme is not in a strong place, and the need to get Dreadnought operational as soon as possible could not be more pressing given the state of the ageing Vanguard class it is due to replace.
The Explanatory Memorandum implies that we are just talking about the transfer of equipment in due course, but from where and at what cost to our own tautly stretched supply lines? No mention is made of the exchange or loan of nuclear propulsion SQEPs—suitably qualified and experienced personnel, which the noble and gallant Lord, Lord Houghton, mentioned —both uniformed and civilian. We are already in a parlous position in this area, but it is difficult to see how Australia, with no nuclear SQEPs, can manage without acquiring some of our people, which would be at significant detriment to ourselves. Australia may look to the United States but my understanding is that it, too, is stretched in its submarine-building programme from equipment, industrial and personnel aspects. I therefore agree very much with the thrust of the views of the noble and gallant Lord, Lord Houghton, on this matter. Although the agreement we are debating is not crafted to cover my concerns, can the Minister say whether the Government will lay down some markers to cover the points I have mentioned before the ratification of this agreement?
On another point, can the Minister give an assurance that we are fireproof so far as the 1958 agreement is concerned? Some may remember the mess we got ourselves into in this area when we tried to help the Canadians move forward on their aspiration for a nuclear submarine force following their 1987 defence review, which set out their vision for a three-ocean navy. The Americans were mightily upset with our offer to the Canadians to provide them with some nuclear propulsion technology, and it took a considerable time before we were able to re-establish our previously good working relationship with the United States Navy.
Paragraph 3.2 of the Explanatory Memorandum alludes to the 1958 agreement and implies that the agreement allows the United Kingdom to share nuclear naval propulsion information, but this is not covered in the agreement per se. Should we have a formal amendment to the 1958 agreement, or a codicil to it, to make sure that we are indeed fireproof?
My Lords, I feel as though we might be in the middle of a game of parliamentary musical chairs and that at some point one of us making winding speeches is going to find that we are interrupted by the bell, so I am not sure whether I should aim to speak for a very long time, get to the bell and stop or should expect to be interrupted in the middle of my speech.
In opening this debate, the noble Baroness, Lady Hayter, pointed out that we are talking about an agreement of considerable strategic significance. As the noble Lord, Lord Lansley, pointed out, the treaty that we are scrutinising today is in some ways quite limited. It is very specific. I want to start with some general points and will make a few specific points about the agreement.
As the noble Baroness, Lady Hayter, pointed out, the context of the treaty is very important. In announcing AUKUS back in September, the Prime Minister said the
“‘AUKUS’ partnership will work to protect our people and support a peaceful and rules-based international order.”
We had a brief opportunity to consider the AUKUS announcement in September when we discussed a Statement, but a Statement repeat in the Lords almost by definition means very little time for debate— 40 minutes—and very little opportunity for those of us who contributed to that debate to stop and assess what our Government and the Governments of Australia and the United States were seeking to achieve. Everybody, with the partial exception of me speaking from the Liberal Democrat Benches, seemed to greet the agreement with acclaim. My slightly more sceptical voice was because I was a little concerned about whether Her Majesty’s Government had spoken to France. It quickly became clear that they had not. As we heard this afternoon from the noble Lord, Lord Hannay, and the noble Baroness, Lady Liddell, this has created certain concerns. So while we support the AUKUS agreement and the agreement we are looking at today on the exchange of information on naval propulsion, can the Minister tell the Grand Committee what Her Majesty’s Government are doing on our wider diplomatic relations to ensure that as we move forward with our agreements with the United States and Australia, we are keeping our other NATO and Five Eyes allies on board? We cannot afford another diplomatic incident. I do not think the fact that the French did not withdraw their ambassador from London is a sign that we did a better job diplomatically than Australia and the United States. What are the Government doing to make sure that our diplomatic relationships are in good order?
Several noble Lords have expressed concern about parliamentary scrutiny and how far we are able to scrutinise this agreement and the wider aspects of AUKUS. While listening to the noble Baroness, Lady Liddell, I wondered whether the International Agreements Committee should be thinking about some sort of parliamentary visit to its Australian counterpart, but I think that might not be possible for all sorts of reasons. I wonder to what extent there is scope for the committees of this House to talk to opposite numbers in Australia and the United States about best practice and how far it can be imported to this House and the United Kingdom Parliament more generally. The Minister clearly cannot answer for a House of Lords committee, but she should be answering for the Government, so can she explain what the Government intend in terms of reporting to your Lordships’ House and the other place, both in terms of this treaty, which is a relatively limited treaty for the next 18 months, and for wider discussions on AUKUS moving forward? That is clearly of importance to the whole House.
In terms of the AUKUS provisions in general, there is a suggestion that it will strengthen the United Kingdom’s defence and international relations. That may well be the case, and certainly the noble Lord, Lord West of Spithead, was keen to say how important it is because, in particular, it has given China a sense that the United Kingdom along with the US and Australia are willing to confront China. However, if that is the case, and part of the purpose of AUKUS is to take on China, to what extent does the United Kingdom have the resources to be able to do that? We have heard from the noble and gallant Lord, Lord Boyce, and the noble Lord, Lord Bilimoria, that there are some questions about our capabilities. To what extent will this agreement be beneficial to the United Kingdom in a military and export sense and to what extent do we think it might be a pull on our defence budget? As the noble and gallant Lord, Lord Boyce, implied, if we are working with Australia, and the main AUKUS deal was sold to Parliament as hugely important in terms of our defence exports, surely we do not stand to benefit if the Australians ultimately do not procure submarines.
Sitting suspended for a Division in the House.
The point I was making, as we were interrupted by the bell, concerns what happens if this agreement does not take us in the direction anticipated and work is undertaken, perhaps by the United Kingdom and UK businesses, but ultimately, we do not see any submarine sales on the order books.
I want to raise two final issues. One is strategic and the other relates to small points in the agreement. The strategic one is the extent to which the Government are still keeping an eye on our own region. A tilt to the Indo-Pacific might seem strategically important and is clearly significant in terms of concerns about China, but to what extent are we able to tilt to the Indo-Pacific and, at the same time, ensure our own continent is secure?
Turning to my two points on the treaty specifically, Article VI talks about not communicating any naval nuclear propulsion information to people of
“other nations, foreign or international entities, or individuals who are not nationals of the Parties.”
In light of the security guidance we were given last week and concerns about a Chinese national, who I assume is a dual national, could the Minister explain to the Committee whether “nationals” here means people with only a single nationality? What happens if a dual national has either Russian or Chinese nationality alongside British, American or Australian nationality?
My final point relates to Article VIII and intellectual property. Is there any concern that, by sharing information and the guarantees under intellectual property, British researchers could lose out in any way, or are the Government satisfied that that clause gives guarantees that are as sufficient and desirable for researchers as they are for the defence sector generally?
My Lords, I too thank my noble friend Lady Hayter and her committee for the report and for calling this debate. The committee invites us to look not only at the agreement in front of us but at the broader area in which it fits. It is important to see the big picture.
I am new to this area of treaties, and I always like to see a piece of paper. The first piece of paper that one is likely to come across on AUKUS is Boris Johnson’s speech. I am not entirely comfortable with that as a document of record, so I went on Google, as one does, and addressed the White House website. It has an excellent document which puts the range and objectives of this package, or whatever we want to call it, in a joint leaders’ statement on AUKUS. I would be happier about the statement if it had three signatures at the bottom; nevertheless, it uses very inclusive language. I shall quote some parts of it. The statement begins:
“As leaders of Australia, the United Kingdom, and the United States, guided by our enduring ideals and shared commitment to the international rules-based order, we resolve to deepen diplomatic, security, and defense cooperation in the Indo-Pacific region, including by working with partners, to meet the challenges of the twenty-first century. As part of this effort, we are announcing the creation of an enhanced trilateral security partnership called ‘AUKUS’”.
To be clear on what it is to cover, the third paragraph states:
“As the first initiative under AUKUS, recognizing our common tradition as maritime democracies, we commit to a shared ambition to support Australia in acquiring nuclear-powered submarines for the Royal Australian Navy. Today, we embark on a trilateral effort of 18 months to seek an optimal pathway to deliver this capability.”
Recognising that the agreement goes much wider than submarines, a later paragraph states:
“Recognizing our deep defense ties, built over decades, today we also embark on further trilateral collaboration under AUKUS to enhance our joint capabilities and interoperability. These initial efforts will focus on cyber capabilities, artificial intelligence, quantum technologies, and additional undersea capabilities.”
It is clear from this carefully worded joint leaders’ statement that this is a comprehensive and ambitious initiative.
The Labour Party welcomes the increased co-operation with our allies and supports the AUKUS agreement. Australia and America are two of our closest security partners, and sharing resources and intelligence with them makes Britain safer. Britain must look after our most important relationships, or we will see our influence and security quickly decline. China’s actions in the Indo-Pacific pose risks to UK interests and threaten a stable trading environment, democracy and human rights, and it is important that we deal with those risks.
However—there is always a “however”—it is also vital that the UK maintain a commercial relationship with China and that we work with it on defining global issues of the day, such as tackling climate change. It is also important that this arrangement does not see resources redirected from Europe to the Pacific and that it strengthens our NATO alliance and other strategic partnerships. Finally, this arrangement clearly brings potential economic opportunities for Britain.
My only problem with this grand vision—and this shows my lack of international diplomacy experience—concerns what this statement is. Is it a treaty? Is it an agreement? How will things change as a result of it? Will it develop into a document which has some enforceability?
In addressing this from a UK point of view, I support the concept and focus of the noble Lord, Lord West. As this pact, this agreement—whatever we want to call it—matures, it will need a high-quality individual with a high-quality team to make sure that it goes right. There are a lot of potential problems. One thing we need is a change in the tradition of the political side of our leadership and the Civil Service. We will need people in a stable relationship with this task because the very considerable industrial and manufacturing complexities—there are also people complexities; this point was rolled out by the noble and gallant Lord, Lord Boyce—will need to be looked at all the time.
We support the pact, but there is a lot to flesh out before it is meaningful. Frankly, what we have in front of us is a modest part of that picture. As far as I understand it, it is a confidentiality agreement driven by the necessities of US law. The International Agreements Committee has brought out some of question marks, which I hope the Minister will be able to help with. I was particularly seized by paragraph 13 of its report, which states that the agreement
“shall settle any disagreements arising in the implementation or interpretation of this Agreement through mutual consultations and negotiations without recourse to any dispute settlement mechanism”.
That sounds wonderful but you end up asking where its teeth are. How will it actually deliver?
The next paragraph, paragraph 14, talks about
“four automatic extensions of six months each”,
which sounds like 31 December 2025; I do not know why it does not say that, nor what automatic extensions are. This paragraph also states:
“Any Party may terminate the Agreement by giving six months’ written notice to the other Parties.”
So it is a pretty fragile situation. When you think about why this may happen, it depends on trust. I suspect that if you asked the French about trust, they would give you a pretty dire analysis of what they see as trust.
Paragraph 16 of the report has been referred to; it is where all these conversations centre. It talks about the Explanatory Memorandum but really it is talking about the thinking behind the document. It states:
“We reiterate our recommendation made in recent reports that the Government should review its quality assurance processes to ensure that all EMs address whether amendments will be subject to scrutiny under Constitutional Reform and Governance Act 2010”.
I would go further: we must have mechanisms to supervise this enormous concept—this trilateral relationship —with parliamentary scrutiny.
We support the agreement in front of us, but we must be much clearer about parliamentary involvement, and I thank my noble friend Lady Liddell for bringing this out. The question is: why? There are two reasons. First, the probability is that this will involve lots of money. The Australians have a somewhat patchy reputation when it comes to building submarines and manning them. There is a reasonable possibility—possibly even a probability—that these boats will end up being built in Britain. That sounds wonderful until you look at the record of building submarines in Britain, with pauses, delays, changes in the shape of the programme et cetera.
The second thing that one has to realise is that this is going to go wrong. Things of this complexity go wrong; life is like that. If something goes wrong, it does not mean that it is lost, it means that the “going wrong” process will have to be managed. That management once again comes back to the talent that we put into the process and the extent to which Parliament is informed, to which there is a degree of transparency, to work through what will be a 10, 15 or 20-year relationship.
My Lords, I first thank the noble Baroness, Lady Hayter, and her committee for their report and for calling this debate. I also thank all noble Lords for their genuinely interesting and very well-informed contributions.
Let me just reprise the salient features of the AUKUS information-sharing agreement. I am very grateful to the noble Baroness, Lady Hayter, who referred to it as being an agreement of strategic significance. My noble friend Lord Lansley made positive comments about the process and the agreement itself and the noble Lord, Lord Hannay, offered a very insightful and reflective commentary. This agreement is based on existing information-sharing practices in place between the United Kingdom and the United States. It will remain in force for only a limited period, and it is necessary in order to enable this key piece of work on submarine nuclear propulsion to move forward.
It is a binding international agreement in law. The noble Lord, Lord Bilimoria, raised the important question of what happens if there is a change of Government. None of us has the capacity to predict or control what properly elected Governments in other states do, but this is a binding international agreement. I think that everyone understands the significance and strategic importance of this agreement to Australia, and I therefore very much hope that the arrangement is secure. If there is a change of Administration in any of the three countries—I do not anticipate that happening in this country; let me make that clear—I would hope that the binding legal dimensions of this agreement would obtain.
In so far as the procedure within the United Kingdom is concerned, we laid the agreement before Parliament in November 2021 for scrutiny in the usual way, and I thank the committee for its role in that process. I thought that the noble Lord, Lord Tunnicliffe, was rather disparaging about the agreement. He thinks it is fragile. With respect, I disagree: I think it is robust and focused. There is very detailed work under the agreement now proceeding. He was unduly pessimistic in saying that he is certain it will go wrong. I disagree. I have every confidence, with the structures in place, that this is an important piece of work, not just for our international interests but also for our domestic interests. It is an exciting prospect, and I do not share his pessimism.
I thank the committee for its scrutiny of the agreement and for the report that it has produced. My noble friend Lady McIntosh asked when we expect it to be ratified, and the answer is by the end of January. For future agreements, the Government would of course comply with any applicable requirements of the Constitutional Reform and Governance Act 2010. The committee drew specific attention to amendments and whether they would be subject to parliamentary scrutiny. Understandably, a number of your Lordships raised this issue and sought clarification. As I have said, the agreement is based on existing information-sharing practices in place between the United Kingdom and the United States, and it will remain in force only for a limited period, enabling the initial programme of work. In these circumstances, the Government consider it unlikely that it will need to be amended during its time in force.
The terms of a binding international agreement, including those on the method of consent to be bound—for example, ratification—are subject to negotiation on a case-by-case basis with international partners. The noble Baronesses, Lady Hayter and Lady Smith, focused particularly on this point, as did my noble friend Lord Lansley. The nature of what happens in the course of the discharge of the functions under the agreement dictates, to some extent, how these matters are approached. Certainly, they would have to be approached with trilateral agreement, and we cannot anticipate what might arise that would need adjustment. We cannot anticipate whether they would raise, for example, issues of commercial confidentiality or national security. The same applies to the nature and form of any follow-on agreement, but I make clear to the Committee that the Government have previously indicated their intention that the majority of important treaty amendments be subject to ratification and submitted to Parliament for scrutiny in accordance with CRaG. I hope that provides an appropriate level of reassurance to Members of the Committee.
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.
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?
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.
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.
I earlier listed the countries that make up the Quad and said India, Australia, Japan and—by mistake—the UK. Of course, it is the US; the noble Lord, Lord Lansley pointed that out to me.
I cannot resist a serendipitous opportunity. The noble Baroness, Lady McIntosh, asked me why the UK is not a member of the Quad. With the integrated review and our tilt to the Indo-Pacific, perhaps there is an opportunity for the UK to join the Quad in the future.
We always keep a vigilant eye on wherever we can find friends and partners. As I have already indicated, we also find different ways of working with them.
AUKUS is not uncontested. As an emerging new partnership, it is open to being misunderstood. All three AUKUS partners are therefore committed to engaging positively and collaboratively with international partners on the regional and global benefits of AUKUS while pushing back on disinformation about arms races and nuclear proliferation.
In addition, we have committed trilaterally under the auspices of AUKUS to enhancing the development of joint capabilities and technology-sharing beyond the nuclear propulsion that we have discussed today. Our initial area of focus for this effort is cyber capabilities, artificial intelligence, quantum computing and additional undersea capabilities. We have agreed to broaden this into other areas as our partnership develops.
The UK will use this element of AUKUS as a platform to leverage its world-leading science and technology sector, working with trilateral partners to identify and exploit opportunities for us to develop new defence capabilities from which we can all benefit. We will foster deeper integration of security and defence-related science, technology, industrial bases and supply chains. In conclusion, this is a significant partnership and a positive development for the United Kingdom, as it is for Australia, the United States and the broader region.
Thank you for allowing me to intervene. Can I return to the Nassau agreement for a moment? I am aware that we are talking about not nuclear weapons but nuclear propulsion, but I quote the Explanatory Memorandum:
“The US-UK Agreement for Co-operation on the Uses of Atomic Energy for Mutual Defense Purposes of 1958 … also prevents the UK and US from disclosing restricted naval nuclear propulsion information to other countries unless specifically authorised.”
We fell foul of that with the Canadians in 1987; that is what I am talking about. It is not about nuclear weapons, but nuclear propulsion, which the Explanatory Memorandum itself admits. As I say, the agreement does not mention this per se. I come back to the point of my original speech: should we have some sort of codicil or amendment to the 1958 agreement to make sure that we do not fall foul of it in this transfer of nuclear propulsion information to Australia?
I am grateful to the noble and gallant Lord for that clarification; I apologise for misunderstanding his question. I shall need to look at that in detail and revert to him with such information as I am able to find.
In conclusion, I thank the noble Baroness, Lady Hayter, and her committee. I also thank your Lordships for a stimulating debate.
My Lords, it has indeed been stimulating. I am only sorry that it had to take place in the Moses Room. We very much welcome that we at least have a trio here—we now have my noble friend Lord Stevenson, and before we had an ex-Secretary-General of NATO. We are honoured that you are here, but it is a shame that something of such great importance has not been debated in the Chamber, because this is a pretty fundamental piece of our future.
There has been a broad and wide welcome for the principle of this agreement, which my noble friend Lord Tunnicliffe called—I do not know whether these were his words or he was quoting—“comprehensive and ambitious”. We should thank him for giving up his birthday to be with us today; I am sure we all wish him the very best for celebrating with us in this generous way.
This has been a significant debate. I am not going to try to go through all the points, as the Minister did. Basically, three things have been spoken of. One is the role of Parliament; the second is about the details of the deal; the third is the wider context. I think that the role of Parliament and the scrutiny of future agreements are significant. My noble friends Lady Liddell and Lord Tunnicliffe, the noble Lord, Lord Lansley, and other noble Lords raised this; there are some really important issues here.
When my noble friend Lord Stevenson—I am particularly glad that he has walked in—was doing the then Trade Bill, there were a lot of undertakings received from the Department for International Trade about how it would deal with future trade deals. He helped to put together what were called the “Grimstone rules” for that but there is a real question for the Minister, who is here on behalf of defence—we also have some treaties coming under the Foreign Office now—about whether her department will give the same undertakings that my noble friend was able to get out of the Department for International Trade. When I joined this committee, I am afraid that it was something of a surprise to me that we were dealing with not just trade but these very significant defence and foreign affairs agreements. I hope that that can be taken into account.
I am sure that the Minister is aware of the report on working practices by the committee that I now chair, published when it was still in the capable hands of my noble and learned friend Lord Goldsmith. I hope that we will revert to that fairly soon because there are really important questions in it about amendments to agreements. I think that the Minister slightly elided over them in her answer because, of course, some amendments may simply say “Minister” instead of “Secretary of State” and we really would not want to come back for that. In our report, we give some criteria for when amendments to agreements should be brought back; I hope that the Minister will take this point back to her department to look at it. Perhaps we could have further discussions on it because this ongoing scrutiny of such an important area will be important.
The noble Baroness, Lady Smith, suggested that we should learn from Australia. I think she was suggesting that I should fly out there—she is nodding; I thought so—and have a discussion with them. However, take the Australian example and the example of our trade deals before we left the European Union: what the European Parliament used to do by way of scrutiny was clearly much more detailed, and it had more information.
In not giving quite the answer I wanted from her, the Minister again used the words “commercial confidentiality”, but when others of us were dealing with the then National Security and Investment Bill—I know that the noble Lord, Lord Lansley, was there at the time—those issues were to be dealt with by the Business Committee in the House of Commons, not the Joint Committee on the National Security Strategy. At that stage, we asked, “How can that Business Committee in the Commons have sufficient security clearance to deal with these commercially sensitive things?” We were told, “Don’t worry, committees can do that”. If they can do it for that Bill, I must say, our committee should be able to do the scrutiny for this one. The excuse of commercial sensitivity should not be used to prevent us seeing things in such a way that we can then advise on taking out secret information and how the rest of Parliament will deal with it. I am sorry if I have gone on about this for a bit too long but the scrutiny of these significant agreements is important.
On the actual deal, both noble and gallant Lords raised some really important issues. Basically, they asked whether we have the spare capacity in terms of both personnel and expertise to be able to do that and still fulfil our own commitments here. They talked about that side of it, and the noble Baroness, Lady Smith, told us not to forget our region as well. The noble Baroness, Lady McIntosh of Pickering, also suggested that.
I remind the Minister that my noble friend Lord Tunnicliffe said that things can go wrong. He built Westminster Underground Station and ran the London Underground. He knows of which he speaks. Big projects can go wrong; the important thing, as he is always telling me, is not to worry about them going off track but what you do about it when they do. So ongoing scrutiny and thought are important. Further, from the committee’s point of view, the answer to my noble friend’s question about who will lead on this will be important when we take evidence. Will it be defence? Will it be trade? Will it be the Foreign Office? We will need to know with whom to engage; that person should be able to speak on behalf of the whole Government.
Lastly—I am sorry not to have covered all the points but I am sure that, when she has looked at Hansard, the Minister will write to all of us if there are any unanswered questions—the Minister did not answer the questions on the wider context, particularly on the implications for Five Eyes and whether it was consulted. She also did not say whether India was consulted, as the noble Lord, Lord Bilimoria, asked. New Zealand is key if it really is saying, “We won’t have those subs here”. It still remembers the “Rainbow Warrior” being blown up in Auckland by one of its own allies. We must remember the sensitivity of New Zealand; if it was not kept abreast of this—something it feels so sensitive about—that obviously has ongoing consequences.
I note the Minister slightly mumbled over the possibility of a change of Government in this country, but I have to say that some of us look forward to that. It should be noted that I am not speaking on behalf of the Labour Party. The noble Lord, Lord Tunnicliffe, who is, said that there is no need to worry because the Labour Party will continue with this if Labour is elected.
I was very reassured by what the Minister said about France. Perhaps she could advise the Prime Minister—it is still the same Prime Minister, unless he has resigned over the past hour or so—to use her choice of words rather than some of the ones he used with regard to France.
This has been a useful discussion, perhaps not on the detail of this first stage, but in saying to the Government, “We see where you’re going, we like the direction, and we like the assumption that you have made that it is important to help Australia in this theatre”. Australia is one of our oldest allies. We have been in many theatres of war alongside Australia, and therefore offering what we can to support it in that region is clearly key. However, there are hiccups that could happen here, so we look forward to a continuing debate on this.
Committee adjourned at 5.56 pm.