Defence giant BAE Systems to seal bumper deal for Brits to start building Australia’s first nuclear submarines

20 March 2024, 06:59

British defence giant BAE Systems is expected to secure the mega contract
British defence giant BAE Systems is expected to secure the mega contract. Picture: Alamy
Natasha Clark

By Natasha Clark

Australia is to sign a multi-billion pound deal this week for Brits to start building their first new nuclear submarines.

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British defence giant BAE Systems is expected to secure a mega contract to design, build and maintain nuke boats Down Under in the next stage of the defence partnership.

Defence Secretary Grant Shapps and Foreign Secretary Lord Cameron are jetting off to Australia today ahead of a fresh round of talks to continue work on the defence pact.

It comes a year after the AUKUS deal was sealed between allies Britain, Australia and the US in a bid to deter Chinese aggression in the Indo-Pacific.

They are also expected to fire the starting gun on the next stage of the pact – the ‘Pillar Two’ – meaning greater cooperation on energy, defence, cyber and economic security.

The pair will have meetings in Canberra on Thursday, before travelling to Adelaide at the end of the week, where the boats are to be built.

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BAE Systems Submarine Factory, Barrow-in-Furness
BAE Systems Submarine Factory, Barrow-in-Furness. Picture: Alamy

The three nations previously announced a pact to team up to provide Australia with nuclear-powered attack submarines by the late 2030s – collaborating on cutting edge tech.

Britain’s biggest defence firm, BAE, are already building and designing the next generation of British nuke subs which are expected to come on-stream in the 2030s, with the Aussie boats in the decade after that.

The US Congress signed off on new laws at the end of last year which will allow them to sell at least three Virginia class subs to Australia.

Some US subs are also expected to be loaned to Australia towards the end of the decade.

Last year, the Ministry of Defence awarded BAE nearly £4billion to start on development and design work for the AUKUS pact.

More than 5,000 jobs are already being supported Barrow-in-Furness in the UK, where they will build on technology from all three nations.

The country’s foreign minister Wang Yi – who met with Lord Cameron last month - will also visit Australia today.

China has accused the trio of embarking on a “path of error and danger” in response to the announced defence deal last year.

A government spokesperson said: "We do not comment on commercial negotiations."