‘Freedoms need to be defended’: Truss hails AUKUS submarine deal amid deepening row with France
New Foreign Secretary Liz Truss has defended the UK’s “hard-headed” security pact with the US and Australia, amid a deepening diplomatic row with France.
The AUKUS deal saw the UK, Australia and the US form a security pact to develop and deploy a new fleet of nuclear-powered submarines, adding to the Western military presence in the Pacific region.
Ms Truss said the agreement showed Britain’s readiness to be “hard-headed in defending our interests”, adding that it could result in hundreds of new jobs.
France was outraged by the deal which sees them losing out on a £30bn contract to supply conventional submarines to Australia, who opted for nuclear-powered subs provided by Britain and the US.
In response, they recalled their ambassadors to the US and Australia, although there was no similar order to return to Paris for the French envoy to London.
Writing in The Sunday Telegraph, Ms Truss made no mention of the diplomatic stand-off with the French.
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British nuclear-powered subs make rare ‘surface’
Earlier, however, a French minister scornfully referred to the UK as the “junior partner” in the trilateral agreement and accused it of returning to hide in the “American lap”.
It comes after Gerard Araud, a former French ambassador to the US, referenced the omission of UK from the ambassador recall.
He wrote on Twitter: “You can interpret the omission of the UK as a sign of conciliation or contempt. Your choice.”
In her article, Ms Truss said the agreement, widely seen as a counter to increasing Chinese military assertiveness in the region, underlined the UK’s commitment to the Indo-Pacific.
She said Britain would always be a “fierce champion” of freedom and that the agreement illustrates the nation’s commitment to “challenging unfair practices and malign acts”.
“Freedoms need to be defended, so we are also building strong security ties around the world,” she wrote.
“That is why last week the prime minister announced, alongside our friends President Biden and Prime Minister Morrison, the creation of a new security partnership called AUKUS.
“It shows our readiness to be hard-headed in defending our interests and challenging unfair practices and malign acts.”
On Saturday, the president of the French National Assembly told Sky News that the bonds of friendship between France and the UK, US and Australia have been “tarnished” by the AUKUS pact.
Speaking while attending the G7 Speakers’ Conference in Chorley, Lancashire, Richard Ferrand said: “I think it has somewhat tarnished the bonds of friendship that we have. Yes, it has made things more difficult in terms of trust and friendship.”
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‘AUKUS alliance will bring us closer than ever’
Pressed on why Catherine Colonna, the top French diplomat in the UK was not recalled, Mr Ferrand said: “Obviously it was not my decision but we thought it was more important to recall the ambassadors of the two main protagonists in this thing.”
Andreas Michaelis, Germany’s ambassador to the UK, has suggested the AUKUS agreement threatens the “coherence and unity of the West”.
In the Commons on Thursday, Boris Johnson sought to smooth over the differences, insisting relations with France remained “rock solid” while Downing Street described Paris as “a close ally and friend” of the UK.
Nevertheless, the prime minister also made clear he expected the agreement to bring “hundreds” of highly-skilled jobs to Britain – jobs which may well have otherwise gone to France.
Ms Truss said the deal could “create hundreds of new and high-skilled jobs, from the shipyards of Govan to the factories of Tyneside”.
The French were reportedly given just a few hours’ notice of the new agreement ahead of what is expected to be a tough election year for Mr Macron.
French foreign minister Jean-Yves Le Drian said the snub was a “stab in the back” and constituted “unacceptable behaviour between allies and partners”.
The pact between the UK, US and Australia has been widely seen as an attempt to counter the growing military assertiveness of China in the Indo-Pacific region.
Beijing swiftly denounced the initiative as “extremely irresponsible” and a threat to regional peace and stability.
Mr Johnson, however, said it was not intended as an “adversarial” move against China or any other power.
The US Office of the Comptroller of the Currency has affirmed that national banks can intermediate cryptocurrency trades as riskless principals without holding the assets on their balance sheets, a move that brings traditional banks a step closer to offering regulated crypto brokerage services.
In an interpretive letter released on Tuesday, the regulator said banks may act as principals in a crypto trade with one customer while simultaneously entering an offsetting trade with another, a structure that mirrors riskless principal activity in traditional markets.
“Several applicants have discussed how conducting riskless principal crypto-asset transactions would benefit their proposed bank’s customers and business, including by offering additional services in a growing market,” notes the document.
According to the OCC, the move would allow customers “to transact crypto-assets through a regulated bank, as compared to non-regulated or less regulated options.”
The letter also reiterates that banks must confirm the legal permissibility of any crypto activity and ensure it aligns with their chartered powers. Institutions are expected to maintain procedures for monitoring operational, compliance and market risks.
“The main risk in riskless principal transactions is counterparty credit risk (in particular, settlement risk),” reads the letter, adding that “managing counterparty credit risk is integral to the business of banking, and banks are experienced in managing this risk.”
The agency’s guidance cites 12 U.S.C. § 24, which permits national banks to conduct riskless principal transactions as part of the “business of banking.” The letter also draws a distinction between crypto assets that qualify as securities, noting that riskless principal transactions involving securities were already clearly permissible under existing law.
The OCC’s interpretive letter — a nonbinding guidance that outlines the agency’s view of which activities national banks may conduct under existing law — was issued a day after the head of the OCC, Jonathan Gould, said crypto firms seeking a federal bank charter should be treated the same as traditional financial institutions.
According to Gould, the banking system has the “capacity to evolve,” and there is “no justification for considering digital assets differently” than traditional banks, which have offered custody services “electronically for decades.”
Related: Trump’s national security strategy is silent on crypto, blockchain
From ‘Choke Point 2.0’ to pro-crypto policy
Under the Biden administration, some industry groups and lawmakers accused US regulators of pursuing an “Operation Choke Point 2.0” approach that increased supervisory pressure on banks and firms interacting with crypto.
Since President Trump took office in January after pledging to support the sector, the federal government has moved in the opposite direction, adopting a more permissive posture toward digital asset activity.
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CryptoUK, a UK-based cryptocurrency trade association, has announced that it will join The Digital Chamber, a US crypto policy advocacy group, potentially marking a significant cross-collaboration on digital asset regulation between the two countries.
In a Tuesday notice, CryptoUK said its team would fall under The Digital Chamber’s umbrella as part of a “unified, cross-border advocacy platform.” Both groups have worked in their respective countries to promote policies favoring the cryptocurrency and blockchain industry, starting with The Digital Chamber in 2014 and CryptoUK in 2018.
“CryptoUK has always aspired to ensure we are driven by policy-led issues, member collaboration, and regulatory engagement,” said Su Carpenter, CryptoUK’s executive director.
The partnership between the two advocacy groups comes as US lawmakers move forward on negotiations to pass a digital asset market structure bill, aiming to establish regulatory clarity for the industry. In the UK, policymakers announced plans to collaborate with their counterparts in the US to explore crypto laws and regulations.
Related: Digital Chamber seeks to guide crypto policy across US states
US-based crypto advocacy organizations, such as The Digital Chamber, have garnered support from former regulators and members of Congress as the Trump White House directs policies toward the industry. Among these groups are the Solana Policy Institute, the Blockchain Association, the Crypto Council for Innovation, and the American Innovation Project.
UK central bank moves forward on stablecoins
On Nov. 10, the Bank of England released a consultation paper to propose a framework for “sterling-denominated systemic stablecoins.” The move by the country’s central bank marked a step toward the UK seeming to play catch-up to the US, where the government passed a law regulating payment stablecoins in July.
Bank of England Deputy Governor Sarah Breeden signaled before the publication of the paper that the central bank’s actions were in response to the US advancing stablecoin policies, and it was “really important” to be synchronized on rules.
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Kemi Badenoch has refused to say that the Conservatives are intending to win next May’s local elections, despite being repeatedly pushed on the issue.
Asked twice to define success for her party at the elections, the Tory leader merely said that she is “going to be fighting for every vote”.
Speaking to Sky News, she added: “Success is going to be people seeing the Conservative Party as the only party that is competent and credible enough to do the tough stuff that this country needs.”
The comments come as the Conservatives continue to trail in the polls.
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Watch Kemi Badenoch’s interview with Sky News in full
New data released by YouGov this morning has put the Tories in third place behind Reform and Labour, a space they have largely occupied throughout the year. The pollster’s weekly voting intention analysis put Ms Badenoch’s party on 18%, down one percentage point.
YouGov’s weekly voting intention poll has the Tories down one percent on last week, and just three above the Greens. Pic: YouGov
Ms Badenoch gave a speech on welfare costs in London on Tuesday, where she attacked the government’s plans to tackle child poverty. Afterwards, she sat down with Sky News political correspondent Sam Coates.
Asked about the local elections, she said: “There are going to be local elections all over the country, and there’s a conservative message that I want everyone to hear: Our country’s not working properly.
“There are fundamental things that need to change. We need to create jobs. Otherwise, we’re not going to have money for councils.”
She added: “We’ve seen new parties like Reform come in. They’re making a hash of things at council level. We need to make sure that people can see the benefits of voting Conservative.”
Ms Badenoch also refused to score her party’s performance out of 10. Pic: PA
When it was pointed out that she had not defined success as winning the local elections, Ms Badenoch said: “The country is going to decide. We’re going to put out an offer, and we’re going to fight for every vote.”
May will see local council elections, as well as votes for the Senedd in Wales and the Scottish Parliament. They are seen as a crucial moment for the Tory leader – and also for Prime Minister Sir Keir Starmer.
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‘Of course poverty bothers me’
Ms Badenoch also refused to score the party’s performance out of 10, as the year draws to a close, and she marks a little over 12 months as leader.
She told Sky News: “When I look at the historic defeats which Conservatives suffered last year, things are definitely better.”
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Challenged on the Tories’ position in the polls, Ms Badenoch said: “Of course, we have a mountain to climb.
“We lost more seats [in 2024] than we’ve ever done in our 200-year history. This was always going to be a long road ahead.”
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