Executive summary

  • The United Kingdom could be regarded as the most unambiguous beneficiary of AUKUS cooperation. The project promises the United Kingdom a critical future submarine capability, continuity of production and Australian investment for their industrial base, access to US technologies, and burden-sharing with partners on cost and workforce challenges.
  • Though AUKUS is often spoken of by commentators as an Australia-US alliance project, Australia gains significantly from the United Kingdom’s involvement. The United Kingdom brings to Australia’s AUKUS enterprise its depth of experience in submarine design and construction, major industry players, amplified collective bargaining power in Washington and tangible support for Australia’s vision of a regional balance of power in the Indo-Pacific.
  • Though the newly-elected Labour Party is somewhat sceptical of continuing their conservative predecessors’ so-called Indo-Pacific “tilt” in favour of concerted focus in the Euro-Atlantic, both parties’ commitment to defence industrial ‘levelling up’ and expanded innovation efforts are ample reason to expect the new Starmer government to proceed with the AUKUS optimal pathway as announced.
  • Yet daunting challenges remain and may ultimately delay, if not obstruct, the United Kingdom’s AUKUS effort. Foremost among them are the competing demands of both other UK submarine classes and more urgent strategic priorities in Europe, cost overruns, and workforce development challenges.

Introduction

Trilateral cooperation on nuclear-powered submarines through the Australia-United Kingdom-United States AUKUS partnership will modernise two of Australia’s oldest relationships. The implications of closer Australian dependence on the United States have been extensively debated; AUKUS either represents a logical step towards integration for an alliance embracing increasingly sophisticated collective security efforts, or evidence of entanglement exposing Australia to future conflict.1 In comparison, the implications of the United Kingdom’s AUKUS efforts for Australia are poorly understood. In the aftermath of the 4 July 2024 landslide electoral victory by the UK Labour Party, whose approach to the Indo-Pacific is expected to differ from its conservative predecessor, it is an opportune time to revisit the United Kingdom’s role in Australia’s most ambitious defence partnership.2

In the aftermath of the landslide electoral victory by the UK Labour Party, whose approach to the Indo-Pacific is expected to differ from its conservative predecessor, it is an opportune time to revisit the United Kingdom’s role in Australia’s most ambitious defence partnership.

As a distant European power, the rationale for the United Kingdom’s involvement in the AUKUS project is not overwhelmingly obvious to all Australians. Rather, the tendency of Australian commentators has been to treat it as primarily an Australia-US alliance undertaking.3 For the few close observers of the United Kingdom’s role, stilted economic growth, cost overruns and workforce shortages in the UK defence industrial base have invited scrutiny of the risks associated with UK involvement in submarine design and construction.4 Recent announcements have made headway in underscoring the value of the United Kingdom’s contribution. Indeed, the Australian Financial Review recently reported that the first proposal for an Australian nuclear-powered submarine fleet was an entirely British procurement.5 The tranche of cooperative initiatives unveiled at the March 2024 Australia-United Kingdom Ministerial (AUKMIN) meeting – the most significant ministerial-level dialogue between the two countries6 - renewed the sense of purpose in the bilateral partnership, to which AUKUS is central.

Ultimately, AUKUS will see Australia and the United Kingdom cooperate more closely than ever. By 2027, British nuclear-powered submarines will forward rotate in Australia. By the early 2040’s, Australia will field a submarine capability co-designed with the United Kingdom, built first in the UK and then Australian shipyards with UK industry partners. In return, Australia will make an investment of A$4.6 billion into the United Kingdom’s industrial base.7 By participating in AUKUS, the United Kingdom stands to advance its naval capability and its innovation efforts, grow its defence industry and deepen its embeddedness in the Indo-Pacific.

In an era where the greatest economic opportunities and security challenges for Australia reside in the Indo-Pacific, European partnerships are rarely cited among Australia’s highest priorities. Nonetheless, in light of AUKUS, a new domestic narrative about Australia-UK efforts is required. Australians can be reassured that the United Kingdom will likely remain committed to the AUKUS endeavour under current and future governments because the opportunities for the UK defence sector and its innovation efforts far exceed any potential drawbacks. However, the United Kingdom's degree of urgency and investment remains contingent upon UK policymakers’ ability to square their AUKUS ambitions with more immediate concerns in Europe, higher priority submarine projects and a constrained naval and industrial workforce.

Source: Instagram

‘Tilting’ and ‘levelling up’: the promise of AUKUS for the United Kingdom

The United Kingdom’s equities in AUKUS cooperation on nuclear-powered submarines were queried after the partnership’s September 2021 announcement. UK experts were candid that their policymakers would search for consolation prizes in a submarine solution that was set to be primarily American.8 Since that time, attitudes have changed considerably, with reporting suggesting that the United Kingdom was the “big winner” of the Australian Government’s Optimal Pathway decision.9 As a result, AUKUS is for the most part uncontroversial among UK officials, both for its vote of confidence in the United Kingdom’s future global role and the opportunities it holds for the British defence sector.

First and foremost, the decision to build the SSN-AUKUS guarantees a strategically critical future submarine capability for the Royal Navy. The United Kingdom had been considering design options to replace its Astute-class submarine fleet since at least 2018.10 Commitment to the SSN-AUKUS – a new nuclear-powered, conventionally-armed submarine design – provides an answer to this question. Participation in AUKUS will spur the upgrading of UK naval bases and nuclear weapons infrastructure and proffer access to US propulsion plant systems and components, vertical launch systems and weapons.11 Co-development of SSNs with AUKUS partners in this regard offers a technological leap for the Royal Navy and a chance to share both costs of development and best practices for design and construction. In so doing, participation in AUKUS ultimately assures a larger and more capable future fleet.

The United Kingdom leapt on AUKUS to extend and complement its national advanced technological development efforts. Over the last three years, the UK Government has introduced a constellation of projects accelerating innovation and capability development. Among these projects is a £6.6 billion (A$12.56 billion) investment in advanced R&D12 focused on AI, engineering biotechnology, future telecommunications, semiconductors and quantum, as well as a generational modernisation of UK nuclear capabilities.13 Support for Ukraine has had the secondary effect of furthering UK innovation projects, as a result of both lessons learned from the conflict and access to seized Russian technology.14 Against that backdrop, collaboration with partners through AUKUS is a welcome accelerant of existing UK efforts in advanced technology – through Pillar II primarily but also through the innovation in nuclear technologies associated with the SSN-AUKUS project.

The positive impact of Australian AUKUS commitments for UK industry are already being felt in the form of new contracts and placements of skilled and experienced Australian personnel in US shipyards.

Facing financial strain at home, the promise AUKUS holds for defence industrial and workforce uplift will motivate continued UK commitment to the partnership.15 UK official justifications for AUKUS have centred on the country’s “levelling up” agenda for developing its defence industry.16 As part of this agenda, former Prime Minister Sunak referred to forthcoming UK nuclear projects, AUKUS submarines among them, as a “national endeavour.”17 Specifically, the future construction of the SSN-AUKUS promises industrial uplift in the form of continuity of production at UK shipyards at Barrow-in-Furness.18 The positive impact of Australian AUKUS commitments for UK industry are already being felt in the form of new contracts and placements of skilled and experienced Australian personnel in US shipyards. Three UK companies – BAE Systems, Rolls-Royce and Babcock – have been awarded a combined £4 billion (A$7.6 billion) contract to design and build SSN-AUKUS.19 In the future, Australia’s promised investment of A$4.6 billion into the UK submarine industrial base is expected to double the size of the Rolls-Royce Derby site and create 1,170 jobs.20 This justification for AUKUS will survive successive UK governments, even as strategic circumstances change.

Consistent with the objectives of recent UK strategic documents, participation in AUKUS advances UK embeddedness in the Indo-Pacific. Though the United Kingdom must prioritise its near-region, especially considering the ongoing war in Ukraine, the country recognises the need to address “epoch changing strategic circumstances” in the Indo-Pacific.21 For proponents of the United Kingdom’s Indo-Pacific “tilt” formalised in the UK’s 2021 Integrated Review, AUKUS is a welcome diversification of UK focus away from local security. Where traditionally UK collaborative defence procurement has been undertaken almost exclusively with NATO partners, AUKUS cooperation is in some regards uncharted territory for the United Kingdom. With the UK’s presence in the region and interoperability with trusted partners set to increase under AUKUS in the near-term through the rotational deployment of submarines, commentators have decreed a “new place in the world at last” has been found for the United Kingdom.22

Virginia-class fast attack submarine
Virginia-class fast attack submarineSource: Getty

Further, AUKUS will increase strategic options for the United Kingdom in other theatres. Even if there is not enthusiastic support for refocusing on the Indo-Pacific across the UK political system, experts generally accept that security in the Indo-Pacific and Euro-Atlantic are linked, in particular by Russia’s “no limits” partnership with China.23 This fact was reinforced by the recent signing of Russia and North Korea’s permanent Comprehensive Strategic Partnership agreement.24 AUKUS nuclear-powered submarines and advanced capabilities are theatre agnostic, keeping options open for UK policymakers in terms of their future use. UK Minister of State for the Indo-Pacific Anne-Marie Trevelyan remarked that AUKUS submarines will be “a new, global, and interoperable SSN capability that will not only support a free and open Indo-Pacific but will also strengthen the UK contribution to NATO in Europe.”25

The unsung benefits for Australia: Learning from friends

UK officials and Royal Navy officers bring a depth of experience with nuclear-powered submarine operation the AUKUS submarine endeavour that is absent from the Australian system. The United Kingdom is the only country to have shared in US nuclear submarine technology previously. Importantly, the Australian submarine fleet has a history of close cooperation with the Royal Navy, including through the service of a number of senior British officers in the Australian Navy.26 As Australia undertakes its most ambitious procurement in history, it has the benefit of learning from the United Kingdom’s example. AUKUS implementation efforts will springboard off pre-existing, robust links between the Australian and UK innovation sectors, navies and industries.

Australia-UK complementarities in SSN development are instrumental to Australia’s efforts to ultimately construct nuclear-powered submarines in South Australia. Australia resembles the United Kingdom far more closely than it resembles the United States in the size of its workforce, the scale of its enterprise and the resources the government can bring to bear. Subsequently, the two countries requirements for their new SSN design are much more comparable than the United States – obvious in the US decision to pursue an independent next-generation submarine capability rather than to field the SSN-AUKUS.27 The two countries’ university systems are cross-pollinated through extensive collaborative agreements and their labour forces are already accustomed to a high degree of mutual exchange, further encouraged by the provisions of the 2023 UK-Australia Free Trade Agreement.28 Taken together, the United Kingdom’s participation in AUKUS is a chance for the countries to leverage already sophisticated cooperation and generate solutions to common capability and innovation challenges.

Taken together, the United Kingdom’s participation in AUKUS is a chance for the countries to leverage already sophisticated cooperation and generate solutions to common capability and innovation challenges.

The United Kingdom’s greatest contribution to AUKUS, as far as Australia is concerned, is its defence industry. Australia’s reliance on US industry for the transfer of Virginia-class submarines is cited by many as the most precarious part of the AUKUS partnership.29 But the United Kingdom offers a second market for supply chain inputs and another industry in which to train Australian talent. Australia’s chosen UK industry partner, BAE systems, is already Australia’s biggest defence contractor, employing 6,000 people and reporting A$1.8 billion in 2023 revenue in Australia.30 With the United Kingdom charged with building the first SSN-AUKUS, Australia has the benefit of observing and implementing lessons learned before testing its newly established industry. It is the United Kingdom that incurs the challenges of fielding the first-of-its-class vessel.

In addition, the United Kingdom lends to the enterprise its world-leading research and development sector. UK expenditure on research and development, at 3 per cent of GDP, exceeds the OECD and EU averages, and is fourth overall of the G7 nations.31 Though the UK approach to shipbuilding is an imperfect analogy for Australia, given the unique functioning of the shipyard around Barrow-in-Furness, Australia stands to learn from the UK shipbuilding sector ahead of the construction of the SSN-AUKUS in Australia.

The involvement of a third partner in AUKUS also gives Australia greater lobbying power in the United States. Not only is the United Kingdom’s involvement a chance to offset some aspects of Australia’s dependence on Washington’s industrial base, which is notoriously over-extended; it is also a chance for coordination on weathering potential disruptions in a notoriously volatile US political system.32 Already, Australian interlocutors report that they regularly coordinate with UK diplomats posted in Washington on their approach to engaging US lawmakers. Both countries satisfy President Trump’s expectation33 that allies spend two per cent of GDP on defence. As a result, experts suggest that Australia and the United Kingdom speaking in unison will increase the countries’ leverage to advance AUKUS progress through the US political system under future administrations.34

Embedding an extra-regional partner more strongly in the Indo-Pacific is consistent with Australia’s stated strategic objective of a regional balance of power.35 The Australian Government increasingly sees aligned European countries as valuable stakeholders in the Indo-Pacific.36 Australia’s 2023 Defence Strategic Review and 2024 National Defence Strategy called for engagement with the United Kingdom in the Indo-Pacific to be enhanced, including, but not only, through AUKUS.37 Though extra-regional partners’ commitments in the Indo-Pacific will always be subdued, the United Kingdom – alongside France and the EU broadly – increasingly is factored into Australia’s strategy as regional threat perceptions sharpen.38 If the value of the collective resolve of democracies was one of the greatest takeaways from Russia’s invasion of Ukraine, Indo-Pacific deterrence can only benefit from a strengthened UK presence. In the near-term, the rotational deployment of UK vessels to Australia increases deterrence around the Australian continent.

Bumps in the road for the United Kingdom

Though embracing AUKUS is almost unambiguously in the United Kingdom’s interests, implementation will grate against severe fiscal constraints, industrial base challenges, organisational issues in the Royal Navy and priorities in Europe. Some of these challenges have already reared their head, while others loom on the horizon. In other areas, the extent of challenges may have been overstated by commentators, at least so far.

The implementation of AUKUS will have to confront the hard limits of UK policymakers’ defence budget purse strings in a budget austere environment. A UK Parliament report at the end of 2023 noted that, “with only a modest presence compared to allies, little to no fighting force in the region, and little by way of regular activity, UK [Ministry of] Defence’s tilt to the Indo-Pacific is far from being achieved.”39 The Ministry of Defence’s 10-year Equipment Plan 2023-2033 was found to be unaffordable, already running a budget deficit of -£16.9 billion ($A32.154 billion).40 Irrespective of the additional commitments to the region AUKUS promises, in the absence of greater resourcing, the House of Commons Defence Committee warned that “the UK may need to curb its ambitions in the region.”41 That said, the nuclear enterprise and the submarine program seem to be on the strongest footing of any defence line items in ongoing budgetary disputes.42

Though it currently commands bipartisan agreement, the future practical viability of UK commitment to all components of AUKUS is not wholly assured. The Indo-Pacific ‘tilt’ is strongly associated with the Conservative Party.43 In the lead-up to the election, experts expected Labour would shift their vocabulary away from the ‘tilt’ and to be wary of additional commitments beyond the Euro-Atlantic area. In the interim, others have noted that the Labour Party has given little real indication of their Indo-Pacific policy and have prefaced their intent for continuity across most defence policy initiatives.44 It should be noted that, as shadow defence secretary, John Healey insisted that Labour’s support for AUKUS remained “absolute.”45 The potential for AUKUS capabilities’ use across different theatres as previously discussed affords the partnership some political protection. Still, a bad outcome in Ukraine would quickly and decisively reorient UK priorities.

The transition to SSN-AUKUS will run up against the constraints of the UK defence industrial base. With the announcement of a British industry partner, commentators have remarked that Australia is putting “all its major shipbuilding eggs in the British defence giant’s basket.”46

As a result, it is likely the proposed timeline for the SSN-AUKUS may slip while the UK industrial base struggles to deliver its first-order priorities for its Navy: the final Astute-class and four Dreadnought-class submarines. The Astute program has been notoriously late, over budget, and its end date has been redacted for the past four years. Even in its early stages, the Dreadnought builds seems to be facing problems; the MOD's 2023 Major Projects data reveals a risk the reactor core production project and spiralling costs could delay the Dreadnought program.47 Officials and experts have questioned whether delays in this class may jeopardise the United Kingdom’s ongoing at-sea deterrent and create a backlog delaying the SSN-AUKUS.48

Successfully partnering on the AUKUS optimal pathway depends on the United Kingdom mitigating the significant workforce and planning challenges facing the Royal Navy.

Successfully partnering on the AUKUS optimal pathway depends on the United Kingdom mitigating the significant workforce and planning challenges facing the Royal Navy. The Royal Navy operates one of the most advanced fleets in the world, but plans to modernise and expand naval capability have been slow to materialise.49The advertisement for the head of the UK submarine fleet on LinkedIn earlier this year drew attention to the severe recruitment challenges befalling the service.50 Between July 2022 and July 2023, the already strained Royal Navy workforce shrank by 4.1 per cent.51 Announced Royal Navy acquisitions for its surface fleet are currently jeopardised by personnel shortages.52 The increasingly long patrols necessary to maintain the United Kingdom’s ‘continuous at sea deterrent’ have affected morale and the scarcity of submariners has made it challenging to get submarines to sea, resulting in periods in which no UK submarine is at sea.53 Most components of AUKUS do not depend upon a UK Navy at full strength – Australia’s dependence is heavier on the UK industrial sector. However, importantly, the steady rate of rotational deployments of UK submarines demanded under Submarine Rotational Force-West will be a daunting ask of a strained navy.

UK officials are increasingly coming to grips with AUKUS as ‘business as usual,’ but there is more work to be done to internalise AUKUS beyond the defence bureaucracy. UK experts remark that the legacy of the secrecy of the AUKUS announcement has had a long afterlife in the UK system.54 Both pillars proceeded with little public visibility, limiting official discussion of AUKUS outside of Cabinet and the Ministry of Defence.55 This is especially true of AUKUS Pillar II advanced technologies. AUKUS does not require the same salience to succeed in the United Kingdom as it does in Australia. But champions throughout government and across political parties remain important, and with the election, the 4 July 2024 election saw 334 new MPs elected with limited awareness of the partnership.56 Greater intellectual investment in AUKUS will ensure the partnership remains resourced and commands the attention to proceed at pace.

Conclusion: An Australia-UK partnership for the future

Historic platitudes about shared values no longer reflect the depth of shared interests between Australia and the United Kingdom. AUKUS embodies officials’ consensus that strategic circumstances demand both closer defence coordination and selective integration. To achieve Australia’s ambition of a favourable balance of power in the Indo-Pacific, such efforts should be embraced.

However, as with any international partnership, progress will be informed by domestic priorities and political will. Collective ambitions at the highest levels of government cannot outpace domestic policy settings or the capacity to deliver. Though both the United Kingdom and Australia have much to gain from AUKUS cooperation, overpromising carries the risk of overextending industries and weakening the credibility of both countries’ deterrent signalling. Australian officials already accept that Britain’s primary zone of operation will remain the Atlantic long into the future. The two countries stand to gain by leveraging their complementarities to mitigate specific national level challenges in workforces, supply chains, public opinion and innovation.

Industrial base challenges should be solved collaboratively where possible for the most rapid and resilient outcome. International placements of UK and Australian students and workers, on the condition of formalised and public non-poaching arrangements, should be expanded. To dull the sharp edges of labour shortages, the interchangeability of the UK and Australian workforces should be a priority. Ensuring the transferability of qualifications and the similarity of sites and processes will be key. Although these efforts should be trilateral, the closer resemblance of the Australian and UK industrial bases (relative to the United States) and the existing cross-pollination of the Australian and UK labour forces offers niche advantages.

AUKUS will likely cement and expand complementarity between UK and Australian higher education systems. As UK universities grow alert to the dangers of overreliance on a shrinking number of countries' students, especially in their STEM areas, the benefits of embracing students and research partnerships with Australia are increasingly pronounced.57 The facilitation of student mobility, scholarships, integrated credit systems and bursaries for travel costs can support this integration and maximise the appeal of the AUKUS enterprise for young people in both countries.

Though social license must be a national project, coordinated messaging about the partnership and an awareness of national sensitivities is beneficial for both countries. Australian and UK officials stand to improve their strategic communications to the public about the risks associated with AUKUS, to counter fatalistic coverage about national challenges facing each country’s AUKUS implementation effort. Maintaining confidence in each countries’ commitment to and capacity for delivery as the optimal pathway inevitably evolves will be crucial to the project’s long-term success.