'British keen to see more Aussie defence companies supply the UK military' Andrew Tillett, AFR
Britain wants to encourage more Australian defence companies to supply the UK military as part of a multi-pronged approach to cement security ties between the two countries.
As the Turnbull government focuses on building up a homegrown defence industry capable of exporting, the British approach to acquisition sees its shy away from protectionist sentiment.
The head of the UK's Defence and Security Organisation Stephen Phipson told The Australian Financial Review Britain was unique among industrialised companies and had the world's most open procurement policy.
"It's about being competitive, getting the best deal for the taxpayer, so we are not running something that is protective [of local industry]," he said on the sidelines of the Pacific 17 maritime conference.
"If you look at the economics of defence, our belief is you get by far the best benefit by having an open, transparent process. There are important elements which must stay in the UK obviously as every sovereign state has but for the vast majority of it is as much international competition we can encourage.
"That encourages our defence industry to be globally competitive."
Industry was in sync with the British government's approach, Mr Phipson said, because there was a clear trade-off for suppliers as they enjoyed support to find new markets as part of the UK's diplomatic outreach.
"As well as buying equipment, part of our deal is our commitment is we help them export, so the government plays a very active role in exporting from the UK," he said.
Mr Phipson said Australian companies' understanding of British procurement was "patchy" with many putting it in the too-hard basket because the UK was so far away.
But he cited the success of Tasmanian company Liferaft Systems Australia, which supplies escape slides for the Queen Elizabeth class aircraft carriers.
Mr Phipson said spoke regularly to Defence Industry Minister Christopher Pyne on how the two countries' industries could work together.
"There are two directions I would say about how we can think about this: our companies are developing strong relationships here in Australia and we have got a base here, and also can we encourage Australian companies to work very closely with our defence industry to be able to part of a supply chain back to the UK," he said.
Part of the British pitch is geared around the $35 billion future frigate contract. Britain's BAE Systems is competing against Spain's Navantia and Italy's Fincantieri, which are both state-owned shipbuilders.
BAE said 30 global companies had committed to transferring bespoke technologies and capabilities to Australia to build the frigate should its bid be successful, creating hundreds of jobs. Among the companies are Rolls-Royce (propulsion systems) and Thales (sonar).
BAE Systems' Glynn Phillips said the intellectual property transfer would help Adelaide develop autonomous shipbuilding capacity capable of competing for exports within a decade.
"Our approach is to create an economic powerhouse of advanced manufacturing," he said.
"Our investment in industrial capability will see highly skilled Australians playing a lead role in the design and building of the next generation warship well beyond the immediate Future Frigate program."
The UK Ministry of Defence's director of ship acquisition, Henry Parker, said Australia's membership in the Five Eyes intelligence sharing community was an advantage in what technology the British could share.
"Especially in areas where the information is classified. If you know what you are looking for in a submarine, you are 10 times or 100 times more likely to find it, and that is based on the fact we have an intelligence relationship led from the US that we share and you share in," Rear Admiral Parker said.