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Michael Fallon discusses Theresa May, Australian Navy frigates and cyber crime -

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MATT WORDSWORTH, PRESENTER: With the ink barely dry on a massive submarine deal, the Turnbull Government is now weighing up bids to manufacture the next generation of frigates for the Navy.

It is a huge contract worth about $35 billion and holds another promise for a local build.

It has also brought a special push from UK Defence Secretary, Sir Michael Fallon, who will tomorrow meet personally with Defence Industry Minister Christopher Pyne to urge Australia to buy British.

He joined me earlier.

Sir Michael Fallon, Australia wants nine frigates at a cost of $35 billion and wants them built in Adelaide. How much does a local build add to the cost?

SIR MICHAEL FALLON, UK DEFENCE SECRETARY: Well, having a local build is quite understandable now. Every country wants to preserve its ship-building capability.

It is for the Australian Defence Minister to decide the best value for the Australian taxpayer.

That's a matter for Australia but we have easily the best design in the Type 26 frigate that I'm championing here in Australia.

In terms of searching for submarines, this has the best anti-submarine capability of any of the bids that are coming in.

MATT WORDSWORTH: In what way is it better than the other bids?

MICHAEL FALLON: It is a much more sophisticated anti-submarine hunter. The other ships are just frigates.

What you need as submarine activity increases in this ocean, as it has increased in the North Atlantic, what you need anti-submarine capability, the ability to detect submarines at range and to do so without being spotted yourself and this is the best stealth hunter in the business.

MATT WORDSWORTH: Boris Johnson has said when you get your two new aircraft carriers in service, you are going to conduct a freedom of navigation exercises. Is that going to be through the South China Sea?

MICHAEL FALLON: Well, we hope the, we are building two carriers. One is already on sea trials. We hope, in the fullness of time, that you will see those carriers in this particular part of the world in this region.

MATT WORDSWORTH: But specifically the Spratly Islands, Scarborough Shoal ...?

MICHAEL FALLON: We haven't mapped out the initial deployments yet but, yes, you would expect to see these carriers in Indo-Pacific Ocean, this part of the world because it is in this part of the world we see increasing tension, increasing challenges.

We've seen terrorism in the Philippines, we see growing tension elsewhere in the region and our carriers will play a part in that but it is too early to be precise about which and exactly where these deployments will take place.

MATT WORDSWORTH: Many Australians will be interested to know about UK domestic politics. If Theresa May will remain Prime Minister for the duration of this term. What would you say to that?

MICHAEL FALLON: Well, she is Prime Minister. She won the last election. We didn't get the size of the majority that we wanted but we did win the election.

Under her leadership we got the most seats, we got the most votes. She has formed a new government.

We have a saying in Britain "the Queen's business must be carried on" and she is now carrying that on.

In particular getting to grips with the challenge of leaving the European Union.

MATT WORDSWORTH: Will she be the Prime Minister for the duration of this term of Parliament?

MICHAEL FALLON: We can't look ahead at this moment to the next election which is nearly five years away but we have the immediate challenge of getting on with organising a successful exit from the European Union, strengthening our economy and continuing to work for a fairer society.

So we have plenty to do without worrying about who the next leader of the Conservative Party is likely to be.

MATT WORDSWORTH: We have a bit of experience here in Australia, the past three prime ministers have been rolled by their own party, you were quoted this week as saying Mrs May is loyally supported at the moment. So what's the British trigger?

MICHAEL FALLON: Well, you shouldn't read any significance into the phrase "at the moment". She is supported by the Cabinet and by the parliamentary party and there is agreement on that, that she is Prime Minister and she must now and all of us must now get down to the work of supporting her.

MATT WORDSWORTH: Your government passed laws last year in the realm of cyber security that can force tech companies to decrypt messages for the authorities, something Malcolm Turnbull is now seeking as well. Have you attempted to use those powers and have those big tech companies complied?

MICHAEL FALLON: Not fully. We want these big tech companies, big international data providers, we want them to do more in the battle particularly against terrorism but also against other abuses, for example, child pornography and so on but particularly against in the fight against terrorism.

We want them to do more and we are continuing to discuss with them how they can help our security services to do more.

MATT WORDSWORTH: But have they specifically told you they will not comply with a law that forces them to decrypt end-to-end messaging?

MICHAEL FALLON: Well, I'm not up on the detail of the exact state of the conversations that the Home Secretary is having but she is in discussion with these companies now to make them do more, to acknowledge their responsibility, to work with us in identifying potential terrorist threats to our country.

They have to do more.

MATT WORDSWORTH: Because it was only in March which you were quoted as saying that you need to urgently do something to force these providers to open up these closed networks. Has anything been decided?

MICHAEL FALLON: Well, we've seen terrorist attacks in our country. We have seen the danger. We do need to give our security services all the powers that they need, the ability to track people who are potentially likely to get involved in terrorism, to be able to track them and to be able to nail any of these plots before they are carried out.

That's vital and we're continuing to work with those companies to make sure they cooperate better.

MATT WORDSWORTH: What's your reaction to Donald Trump's tweet saying the US Government won't accept or allow transgender individuals to serve in any capacity in the US military?

MICHAEL FALLON: Well, our own military accepts transgender. We believe in equality, first of all, but we also believe our military should reflect society so we have been dismantling any barriers to equality.

For example, this year I've announced that all parts, all branches of the Royal Air Force will be open to women for the first time.

They'll be able to serve in the RAF regiment and we're ensuring that we do promote the military career as something that's open to everybody whatever their gender, whatever their sexuality.

MATT WORDSWORTH: Sir Michael Fallon, thanks so much for your time.

MICHAEL FALLON: Thank you.