INP0013

Written evidence submitted by Babcock International Group

Introduction:

Babcock is a FTSE250 listed international aerospace, defence and security company with a leading naval business, headquartered in London. We specialise in providing critical, complex engineering services across defence, emergency services and civil nuclear markets, both in the UK and internationally. The evidence in this submission is informed by our UK business, but also reflects perspectives from our businesses in the Indo-Pacific region:

This submission addresses questions 3, 8, 9, 11 and 13 as this is where our expertise lies.

Summary:

 

 

 


Responses to Questions

Q3. What impact has the Carrier Strike Group deployment had in the region?

  1. The visit by Royal Navy submarine HMS Astute to Perth, Western Australia gave key-decision makers in Australia the chance to hear first-hand from its crew details of the submarine’s capabilities. This helped reinforce and confirm the rationale for the Australian decision to switch to a nuclear powered platform.
  2. As HMS Queen Elizabeth visited Korea, the presence of the Carrier Strike Group provided a symbolic backdrop to a cooperation agreement on future aircraft carrier design, which was signed between Babcock and HHI.
  3. The Carrier Strike Group visited Oman after completing operations in the Indian Ocean, coming alongside at Duqm. This highlighted the importance of the new Joint Logistics Support Base (UKJLSB) operated by Babcock and our local partner.

Q8. Does the UK need bases in the region?

  1. Yes. The Defence Command Paper plans for an increased UK maritime presence in the Indo-Pacific through the deployment of Offshore Patrol Vessels, a Littoral Response Group and Type 31 frigates (p.32).
  2. These platforms will need to be supported in the region, so the UK will need access to local facilities on an enduring basis. The existing UK bases in British Indian Ocean Territory and at Duqm, Oman, will play a key role. But a sustained and enduring presence will require access to additional dockyards with the appropriate infrastructure and facilities.
  3. The visit by HMS Astute to Perth, for example, showed the limitations of what is currently available in Australia, where existing facilities do not yet have the infrastructure to fully sustain Royal Navy vessels. This was despite the fact that Babcock – who sustain them in the UK and internationally – have an existing and substantial presence there.
  4. To bolster its own Indo-Pacific strategy, the United States has invested A$270 million in an aviation fuel storage facility in Darwin, grown its US Marine deployment presence in the North of Australia and has co-hosted communications infrastructure in central and Western Australia (Pine Gap and Harold E Holt Naval Station).

Q9. What challenges are there for UK Defence in its Indo-Pacific tilt, both in terms of achieving its goals and operating in the region?

  1. The Integrated Review set out the UK’s goal of being ‘the European partner with the broadest and most integrated presence in the Indo-Pacific – committed for the long term’ (p.66).
  2. For a broad and persistent UK Naval presence, the Royal Navy will have to keep its platforms in the region for longer period of time, if not through-life. This will require trusted industrial partners capable of sustaining warships and submarines “at reach”. Companies such as Babcock, with experience of complex platform sustainment for the Royal Navy and partner navies, and with engineers and facilities in the region (e.g. Oman, Korea, Australia, New Zealand) can play an important role.

Q11. What progress has there been following the announcement of AUKUS?

  1. Discussions relating to AUKUS to date have been between governments, and engagement with industry has been strictly limited. Given the vital role industry will have in making AUKUS a success, we feel it is imperative that key private sector partners are brought into these discussions at an early stage. Given the importance of the areas covered by AUKUS, it will be important to have early notice of timeframes and expectations if industry is to adapt and respond.
  2. Babcock is a business trusted by the partner governments to work in the areas covered by AUKUS, and looks forward to supporting it.

Q13. What does AUKUS mean for UK defence industry and for UK supply chain resilience?

  1. An aim of AUKUS is to foster deeper integration of the industrial bases and supply chains, bringing the potential for greater and more effective industrial investment and spend across the three partner countries. This could bring opportunities for the UK defence industry to grow its business in Australia and the US, both independently and through increased collaboration and partnerships with indigenous companies. It is also probable that firms from the US and Australia will be seeking reciprocal opportunities.
  2. It is too early to know the true value and impact of AUKUS on UK industry as much will depend on government procurement decisions which are yet to be made. For instance, it is not yet clear if the Australian future submarine will be based on a UK design, US, or a new collaborative joint project. Each of the three options would impact UK industry in different ways.
  3. AUKUS provides an opportunity to test and establish a “trusted” supply chain concept (e.g. in naval warship sustainment) whereby firms in partner countries can contribute to the supply chain resilience of the UK and vice versa. Closer Australia/UK economic and trading arrangements may make it easier for firms to work across both countries if they address areas like the mutual recognition of qualifications, intra-company transfers etc.

4th March 2022

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