BAE Systems has received a boost after it was announced the firm will partner with ASC Pty Ltd to build Australia’s nuclear-powered submarines, in a major moment for the AUKUS programme.

Meeting in Australia, Defence Secretary Grant Shapps, Australian Deputy Prime Minister Richard Marles, and US Ambassador to Australia, Caroline Kennedy, welcomed the partnership.

The submarine builder deal follows months of negotiations and is being hailed as a monumental success for British industry by the Government.

First announced in September 2021, AUKUS is a trilateral security and defence partnership between Australia, the UK, and the US that will see the nations work together on a range of capabilities, including a conventionally armed, nuclear-powered submarine capability for Australia.

BAE chief executive Charles Woodburn said: “We’re extremely proud of our role in the delivery of this vitally important, tri-nation submarine programme.

"Our selection as a partner in Australia, alongside ASC, recognises our role as the UK’s long-term submarine design and build partner and as a key player in Australia’s maritime enterprise and wider defence landscape.

"Drawing on decades of experience in the UK and Australia, we look forward to working with ASC to develop an enduring, sovereign nuclear-powered submarine building capability for Australia.

“We’re already making good progress on the design and development of the next generation submarine in the UK where we have more than 1,000 people working on the SSN-AUKUS programme and major infrastructure investment underway.

“This latest step will ensure an integral connection between the UK design and the build strategy development in Australia as we work together to deliver next generation military capability as well as considerable social and economic value to all three nations.”

Defence Secretary Grant Shapps said: “In a more dangerous world, today’s announcement symbolises the huge confidence our close partner Australia has in our world-leading defence industry, including companies such as BAE Systems and Rolls-Royce.

“Through these collaborations, British industry will grow, and thousands of jobs will be created across the country, delivering security and prosperity to our two nations.”

Opportunities through the AUKUS supply chain for British industry could be worth billions across the life of the Australian submarine programme, officials say. 

That includes Rolls-Royce, which will deliver the nuclear propulsion plants for the Australian programme.

As announced in March 2023, Australia has agreed to make a significant investment into the UK’s submarine industrial base, including Rolls-Royce, Sheffield Forgemasters, and their supply chains, to support the delivery of the Australian SSN-AUKUS programme.

This investment, alongside funding from the UK Ministry of Defence, will enable the Rolls-Royce Derby site to double in size, with a further 1,170 highly-skilled jobs created.

These jobs are part of the 7,000 additional British jobs that the UK’s and Australia’s AUKUS submarine programme will generate throughout its life.

At the peak, there will be over 21,000 people working on the SSN-AUKUS programmes in the UK – concentrated in Barrow and Derby.

The first UK submarines built to this design will be delivered in the late 2030s to replace the current Astute Class vessels, and the first Australian submarines will follow in the early 2040s.

The appointment of a builder by Australia comes a year after Prime Minister Rishi Sunak, Australian Prime Minister Albanese and US President Biden met in San Diego, where they announced that the first generation of AUKUS submarines would be based on the UK’s designs.