AUKUS0013
Written evidence submitted by ADS.
1.1. ADS is the trade association for the UK’s aerospace, defence, security, and space industries, representing 1,500 members. We work with those sectors to secure the UK’s advantage, enhance our international positioning as a go-to destination for innovation, and deliver on our sustainable leadership goals.
1.2. Whether representing industry, connecting our members with business opportunities, or driving forward innovation and growth, ADS is at the forefront of an array of activities, events and programmes that benefit our members. ADS members are the custodians of a world-leading advanced engineering and services workforce, fuelling UK prosperity, and providing more than 427,000 jobs to the UK each year.
2.1. As the UK navigates an era of rapid technological change and strategic competition, the AUKUS partnership represents a fundamental shift in how Australia, the UK and the US collaborate on cutting-edge technology and ensure collective security.
2.2. The practical challenge to deliver AUKUS Pillar 1 cannot be underestimated. UK industry needs to work closely across the Defence Nuclear Enterprise in conjunction with the three AUKUS nations to safely transfer nuclear technology whilst ensuring compliance with all non-proliferation obligations. Since its conception, Pillar 1 has made significant progress, in part due to the ability of UK industry to share the decades of experience it holds in submarine capabilities. Investment within dockyard capability both in the UK and the US is being used to increase output, and there has been an embedding of Australian Government personnel within UK industry to work in a more integrated manner.
2.3. While significant progress has been made, including legislative changes to remove export control barriers, Pillar 2 is still waiting for the right demand signals, ownership, clarity, and accompanying roadmap with a timeline needed to deliver. AUKUS is an ambitious project to drive collaborative research and to co-develop and co-create new technologies. The UK has an opportunity in the Defence Industrial Strategy, and the process of Defence Reform, to ensure adequate resource and funding are allocated for the UK to properly lead in core areas.
3.1. Since 2021, there have been several significant geopolitical shifts and changes that have possible implications for the assumptions on which AUKUS was signed, however it is worth noting that despite recent elections in all three AUKUS nations, each country has re-committed to AUKUS, declared support for the trilateral agreement, and the strategic rationale for AUKUS remains strong. Russia’s invasion of Ukraine has demonstrated that peer-to-peer conflict is once again a reality that nations must be prepared for. In the years since 2022, defence budgets have risen as nations have placed greater emphasis on industrial resilience, racing to increase production capacity, and to rebuild stockpiles.
3.2. Against the backdrop of shifting US priorities, and an unpredictable US Administration, it is also essential to recognise that US assumptions around defence, and the UK’s role in it, are shifting as well. President Trump has made it clear that European nations must take greater responsibility for the security of Europe, which requires the UK and wider Europe to refocus efforts on building the strength and resilience of the European defence industrial base, and to collectively address key areas which support wider deterrence activity of NATO nations. The UK must continue to strengthen trilateral support for AUKUS and deepen collaboration opportunities with both the US and Australia for AUKUS to succeed as a long-term partnership. Looking beyond the procurement of Pillar 1 submarines, the US administration’s shifting stance towards a more “America First” approach to defence procurement may have ramifications for future collaboration projects.
3.3. Despite a commitment to increase defence spending, the UK is operating under tight fiscal constraints. Simply put, AUKUS must deliver tangible industrial and technological benefits alongside the security benefits of the trilateral relationship to justify continued investment. Similarly, the UK Government’s “China Audit” will have to balance developing stable trading relations, with protecting the UK’s national security, geopolitical interests, and reinforcement of our Allies at a time of escalating Indo-Pacific threats. The UK Government has committed to AUKUS and its participation presents a critical vehicle to utilise international industrial collaboration and demonstrate UK commitment to security in the Indo-Pacific region, whilst still maintaining diplomatic room to continue trade with China in appropriate civil areas.
3.4. With the Australian Prime Minister Anthony Albanese securing a second term, with a stronger mandate, this significantly bolsters the AUKUS partnership, reinforcing Australia's commitment to this crucial trilateral security alliance. It provides the continuity of leadership to ensure stability in Australia's foreign policy, in turn facilitating deeper cooperation with AUKUS partners. Whilst strong commitments have been made to date surrounding trilateral collaboration, the three AUKUS partners need to more fully embrace industry into long-term strategic partnerships surrounding the submarine enterprise to ensure delivery.
3.5. The development of a clear AUKUS Pillar II industrial roadmap complements the UK’s NATO-first policy by identifying investment and collaboration areas with Australia and the United States to enhance capabilities that are beneficial across alliances. A greater understanding of how this can be mobilised, at pace, in scope and reach is now required, alongside the funding to operationalise this.
3.6. With a lack of clarity on the AUKUS Pillar 2 roadmap and schedule, there is a risk that industry focuses investment opportunities in other areas. A clear roadmap is needed for industry to invest and plan against.
4.1. There is an opportunity under Defence Reform to strengthen AUKUS co-ordination, accountability and governance. Some of these changes have begun, but the UK needs to bring policy, capability and technology requirements, and industry engagement together. Government could establish a Central AUKUS Pillar II Coordination team, exploring various models, which must integrate and embed into the new structures under Defence Reform. For instance, integrating a team comprised of representation from MOD, DSIT, FCDO, DBT, and UKSA under one roof would follow the example of the U.S. National Technology and Industrial Base (NTIB) office. Another model, which has the benefit of including industry as a key strategic partner, is the international organisation that manages the development of the Global Combat Air Programme (GCAP) on behalf of its Parties, the GCAP International Government Organisation (GIGO). A permanent structure is essential to prevent AUKUS (Pillars 1 and 2) from becoming vulnerable to shifts in national election cycles, changing political and departmental priorities, and to collectively establish and agree how success is being measured. The SSNA (SSN AUKUS) Program Interface Office provides some of this support for Pillar 1, however more work is needed to establish and grow the office, and there is a pressing need for a permanent structure for Pillar 2. The upcoming Lovegrove Report must address this and provide clarity on the way forward.
4.2. An industry consultation and contracting mechanism is essential from the outset to ensure that the development of capabilities and technologies under AUKUS aligns with industry expertise, capacity, and innovation. This collaboration would enable timely delivery of requirements, strengthen trilateral partnerships, and ensure continuity despite political or policy changes. Collaboration and contracting mechanisms must ensure consultation mechanisms for all levels of the supply chain, including Mid-tiers and SMEs.
4.3. Outside of the security co-operation agreement, the heart of AUKUS focus is around co-development of innovative cutting-edge technology. Working closely with the newly announced UK Defence Innovation (UKDI), Government should appoint a National AUKUS Technology Envoy, a Senior Responsible Owner (SRO) focusing on Pillar 2 who can co-ordinate across government, represent UK interests with partners, and champion industry and innovation engagement. Clarity is also needed on whether the SRO will sit in the new National Armaments Director (NAD) Group, or in the Military Strategic Headquarters (MSHQ).
4.4. This inquiry has been welcomed; however, AUKUS receives minimal dedicated scrutiny in Parliament beyond this committee and the AUKUS APPG. Oversight is required to ensure value for money and delivery, industry participation, public transparency, and legislative alignment, particularly around export controls and security co-operation laws. Linked to this, there is a need for greater awareness across Parliament, working with the AUKUS APPG, of both the nuclear enterprise and the opportunities for the UK that AUKUS Pillar 2 offers.
5.1. The three AUKUS nations have made considerable progress to streamline their respective export control systems and minimise bureaucratic burdens on their industries to deliver the closer cooperation, which is essential for the successful implementation of AUKUS initiatives. There were substantial efforts to enter detailed consultation with industry from an early point, followed by careful assessment of consultative input. It should be noted however, whilst these US changes have removed barriers for a considerable quantity of trade, some sensitive technologies continue to require licensing.
5.2. In August 2024, the UK published a new Open General Licence (‘OGL’) for AUKUS nations, which leveraged the same principles as the ITAR freedoms and was set to mirror the same Excluded Technologies List (ETL). The UK also implemented a new process to support tracking of ITAR outside of the UK’s borders through the extant F680 security approval process. In Australia, comparable freedoms have been introduced, alongside major reforms in the Australian export control regulations. The Australian export control mechanisms also exploit an ETL. It should be noted that whilst all three ETLs are very similar, there are slight nuances driven by differences in language or structure of regulation. It has also been reported that the need to still apply for F680 approvals, now with added ITAR-related complexity, has created a dual burden that is particularly challenging for SMEs.
5.3. ADS is currently actively encouraging as many UK entities as possible to apply for membership of the “Authorised User Community” (AUC) and to start to make use of the changes made to export controls. The addition of an approved AUC logo will help promote and support AUKUS nation collaboration. At the moment, it is still too early to tell if the changes made have achieved their aim. However the more entities that become part of the Authorised User Community, the better the constructive feedback can be to Governments. The joining process has been rapidly improved based on feedback so far, albeit members reported significant onboarding delays to begin with. An iterative approach is, therefore, needed to refine the regimes and ensure that the new processes and procedures can evolve to ensure successful delivery of AUKUS. Providing public visibility of those companies who are part of the AUC would also be beneficial to industry, for companies to identify collaboration opportunities or verify compliance across the supply chain.
5.4. As we await the demand signals for Pillar II, we will need to see what impact this may create through the Excluded Technology List (ETL). AUKUS Governments have stated that the ETL will be periodically reviewed, identifying barriers and opportunities. However, in order to make these changes effective, the 126.7 AUKUS nations ITAR exemption needs to be tested.
Pillar 1
6.1. The progress of Pillar 1 in relation to the 2023 Joint Leaders' Statement on AUKUS cannot be accurately assessed as there is no schedule with sufficient detail to be reviewed and assessed. Procurement of long-lead items are underway, and there has been good progress made on the design. Industry mobilisation is similarly making progress, with increasing workforces and investment in Barrow and Raynesway to meet this demand. Developing Australian domestic nuclear qualified and experienced personnel in line with the optimal timescales will be challenging, however. UK industry needs to support Australia more on this journey and share lessons learnt from developing the UK workforce. Building on this, the focus to date has predominantly been on the build element of the AUKUS programme, rather than consideration for the sustainment or wider ecosystem that is needed to successfully enable a nuclear submarine capability.
6.2. Industry capability is being bolstered through Australian investment within the UK and US shipbuilding industry, with the commitment to a multi-boat programme providing clarity and investment certainty to supply chains. AUKUS is providing an attractive offer for recruitment and development of UK skills, with nuclear apprenticeships and graduate programmes remaining oversubscribed.
6.3. There is still a lot of work to be done to create a favourable enabling environment for UK industry. This includes addressing the slow speed of sharing security clearances for the vetting of personnel across the three nations, the issue of mutual recognition of other partners’ cyber security standards, and clarity on the relaxation of visas to allow free movement between the three nations. An AUKUS skills passport should be considered to address this latter issue to enable all three AUKUS nations to achieve success and attract the skills necessary to deliver on AUKUS ambitions. The Government should also look to wider international programmes such as the F35 and GCAP programmes, both are good examples on how these barriers have previously been addressed.
Pillar 2
7.1. AUKUS Pillar 2 has the potential to enable AUKUS nations to gain strategic advantage in the development of advanced capabilities. However, despite a strong trilateral narrative around the aims of AUKUS Pillar 2, there is currently no dedicated funding or project pipeline. This is essential to provide industry with the confidence to invest.
7.2. The UK must pursue key opportunities and develop leadership, especially in the underwater battlespace where it holds a leading position. Collaboration with Australia could be instrumental in jointly bolstering such critical capabilities. There is also opportunity to further strengthen collaboration with Australia in other strategic areas such as Guided Weapons.
7.3. However, to deliver on this, there is a need for all three Governments to agree and clearly articulate not only the strategic priorities, but the specific lines of effort, to focus cooperation and collaboration, and to prompt investment and focus resource. To date, progress on delivery of Pillar 2 has been hindered by the lack of a clear, actionable roadmap and ownership. The absence of a clear strategy that links technology development to capability delivery limits companies’ ability to prepare, invest and engage with Pillar 2 opportunities. The development of specific initial programs within each of the eight Pillar 2 categories is essential to provide focus and enable delivery.
7.4. The biggest challenge for industry at all levels is accessibility to Pillar II projects. Apart from Maritime Big Play, Government hasn’t communicated or been seen to widen the participation on current programmes that have evolved into AUKUS programmes, or the procurement approach that will be adopted (for example market competition or partnering with national champions). Therefore, the assumption is that so far there is no new funding for AUKUS programmes. We await the outcome from the SDR, the Defence Industrial Strategy, the Spending Review, Sir Stephen Lovegrove’s Review, and the Australian Government’s Review which may change this, and ADS has advocated for a dedicated funding line for AUKUS to be included in the Defence Industrial Strategy. Additionally, the role of AUKUS Pillar 2 within Defence Reform and the responsibility of the new National Armaments Director (NAD) and their first line for AUKUS should be clearly defined. It should also be clearly articulated how this interacts with Defence Nuclear and the responsibilities in that Department.
7.5. The launch of the AUKUS Innovation Challenges have been welcomed; however, the first challenge was not well communicated to industry, nor did they use the ACIF Trade Associations to spread this message, both of which limited their impact. Lessons were learned for the second Challenge, but currently it has been communicated that there will be only one challenge per year, which limits the innovation AUKUS requires and provides only a slim opportunity for companies to be involved.
7.6. Governments could explore whether linking multilateral armament programmes —where relevant— could help accelerate progress in critical areas such as air domain capabilities, underwater technology, and interoperability. These will be essential for potential conflicts in the Indo-Pacific, as well as for the defence of European borders.
8.1. UK industry is keen to provide support to AUKUS ambitions, however current feedback into industry on the progression, aims, and focus of the UK Government for AUKUS Pillar 2 is weak. The UK Government has been engaged with the UK Trade Associations through the Advanced Capabilities Industry Forum (ACIF) but has limited direct engagement with industry, and there are no clear frameworks or mechanisms for industrial engagement moving forward. HMG needs to make it clear who within Government is responsible for building the quality of the industrial dialogue on AUKUS, and implementing mechanisms for industrial engagement and partnership. The ACIF is still in its infancy and is developing where it can add value in the enabling areas, whilst industry awaits funded capability and technology programmes. However, a good example of direct industry engagement has been through Maritime Big Play highlighted above.
8.2. There is need for a stronger “One Team” approach between Government and industry to synchronise operational capabilities, timelines, and technological advancements. Success under Pillar 2 will require partnership between Government, Industry, Academia, and regulators to ensure that we can develop, procure and integrate new technologies at speed. One potential solution for this would be to appoint a UK industry lead for each of the AUKUS Pillar 2 technology areas, who would lead these partnerships to drive technology delivery and adoption. It is vital that information sharing networks are streamlined for regulatory and export control alignment, and that the UK can invest in the R&D that will enable progress to be made on AUKUS capability development. In technology areas where open architectures will drive capability, it is also essential that fair and equitable Intellectual Property (IP) access is agreed. Clarity on ownership, and rights to utilise and exploit IP to build sustainable business cases to invest in R&D will be critical to the success of technology adoption at speed.
8.3. The UK Government will launch an AUKUS Pavilion at DSEI London in September 2025 with the support of the UK Trade Associations, of which ADS will lead. This will be an AUKUS Nations Pavilion with a primary aim of supporting the tri-lateral Industry base (with a focus on Mid-Tiers and SMEs). It will bring together those who have signed up to the Authorised User community together and educate those who have not, to discuss how we can enable innovation, and create a permissive regulatory and policy environment in all three nations. Its secondary aim is to use the AUKUS Pavilion as a platform to deliver strategic messaging to a wider audience on the progress and opportunities of AUKUS.
8.4. Ultimately, industry requires a clear roadmap for Pillar 2 that identifies ownership, aims and objectives alongside a schedule for engagement and possible procurement. Without this clarity, there will be a greater uncertainty and risk of AUKUS projects being relegated in competition for investment into other opportunities. Additionally, there is currently no forum available for industry to propose new ideas for Pillar 2 that AUKUS nations could review and consider, which could add value to capability development.
9.1. Expanding AUKUS Pillar 2 beyond Australia, the UK, and the US introduces significant strategic opportunities and complex challenges. Pillar 2 focuses on advanced capabilities such as quantum technologies, AI, cyber, hypersonics, and undersea capabilities—areas where broader collaboration could be valuable but also sensitive.
9.2. There are, however, a number of potential opportunities and benefits in bringing in other nations, including:
9.3. It has been stated that the AUKUS compact won’t expand outside of the three nations. However, there could be scope to bring in new nations on certain capability or technology areas under Pillar 2 to achieve the above points. The previous UK Government announced in 2024 that they were assessing like-minded nations could join, and this review could be continued by the current Government to understand the opportunities and challenges. In doing so, there are some potential challenges that must be addressed:
9.4. Overall, the potential medium-term expansion of Pillar 2 to include additional countries could be beneficial. However, this should be contingent on three key factors: first, establishing effective programmes among the three existing partners as a foundational step; second, better assessing the indigenous capabilities that prospective new country partners could contribute; and third, any nations brought on board would have to satisfy US concerns over the effectiveness of their national export control systems. This would ensure that capabilities are mutually strengthened rather than diluted, therefore securing a more strategic and sustainable expansion in the future.
30th May 2025