Liz Truss will need to resolve Britain's defence dilemmas

The distinction between security and resilience is often thought of as two sides of the same wonkish coin. For the next British prime minister, who will be confirmed by today’s leadership election results, it is one that is absolutely vital to the country’s future, as well as how history judges her or his time at the helm. The headlines have been all about what efforts Liz Truss will make to bolster the resilience of the British people to cope with the energy crisis and the enormous squeeze on living standards. The equally big and costly challenge will be on the UK to repair its security and defence gap. That will mean big changes in defence spending but also shifts in the policy direction that has been in place since the time of Tony Blair, or even John Major. Boris Johnson’s last week in office saw the spotlight fall on one of the big commitments that the new government must follow through with and even double down on. That is the Aukus pact that would see the nuclear umbrella extended through the US and UK to Australia. The submarine initiative is much bigger than a mere deal to supply undersea defence capabilities to a long-standing ally. It is a reorientation of a defensive alliance that stretches from the North Atlantic to the South Pacific with an important focus on China. The success or failure of the arrangement is threatened by constraints in the US capacity to both overhaul its own submarine fleet and supply the allies with all the equipment to make Aukus a success. This has put the UK in the driver’s seat of the deal – which explains Mr Johnson’s trip last week to showcase the Astute-class submarine in the presence of Australian Defence Minister Richard Marles. For the first time, Australian navy personnel will join the UK nuclear fleet crews and co-train with them. With a timeframe stretching all the way to the 2040s, Australia is planning to building its own eight nuclear-powered submarines using technology supplied by both the UK and US. The Aukus alliance was sealed at the expense of an Australian deal with France, and there was some schadenfreude among French commentators last week when a US admiral warned that Washington might not be able to deliver on its commitments. As the Los Angeles-class and the Ohio-class submarines retire, US yards are stretched. With some Australians calling for a stop-gap, the expansion of the UK yards' output is the obvious bridge to the future. This is not, however, a simple matter of Australia directing some orders to the UK. An expansion of UK defence resources would be needed to facilitate the shift. UK Defence Secretary Ben Wallace commissioned a six-month review into the submarine balance in the UK’s navy, indicating he believes that there is a greater role for undersea defences. He described the decision as vitally important when submarines “may well be the deciding factor in future conflict”. An instantly influential report from the Royal United Services Institute (Rusi) think tank on Friday revealed that the UK is already planning to spend an extra £2 billion ($2.30bn) annually on submarine capabilities and expansion. But if Mr Wallace is correct, the figure will need to be much higher. The development of new-generation submarines and a probable increase of the UK fleet alone from seven to 10 vessels are set to push national defence spending above 2.5 per cent of GDP. This will be quite a commitment for London to put its shoulder behind. Rusi projects that, for the UK to move up to 3 per cent spending on GDP, the government would have to find another £150bn. It also finds that, if the extra outlay was funded from tax increases, key income taxes would need to rise by 5 pence in the pound. Rusi, which acts as an adjunct of the security establishment in London, sketches out other important implications of the current thinking – such as a rise in the military forces numbers by about 40,000 personnel, at a time when soaring inflation has cost implications. Add in all the other pressures, such as a new generation of the nuclear deterrent itself, ballistic missile improvements and the challenges of developing space capabilities, and that is a formidable outlay. The war in Ukraine and pressures from rising powers such as China mean that there is little time for the new British leader to dither on making these commitments. If anything, the scale of the energy emergency that has unfolded in Europe is proof that the defence demands are tied to the inflation crisis. A short-term squeeze and the high-risk premium hanging over the pound sterling complicate the picture yet further. It is a test few would envy for the new prime minister, who will take up the reins after the traditional meeting with Queen Elizabeth tomorrow.