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Factba.se: Australia DFAT Country Briefs - United Kingdom
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COUNTRY BRIEFS


INTRODUCTION

The United Kingdom of Great Britain and Northern Ireland, also known as the UK, has a population of approximately 62 million people. The UK is a multi-national state composed of four parts: England, Wales, Scotland and Northern Ireland.

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POLITICAL OVERVIEW

UK Parliament

The UK Parliament is the supreme legislative body in the UK and British overseas territories. The parliament is a bicameral assembly, with an upper house, the House of Lords, and a lower house, the House of Commons. At its head is the Sovereign, Queen Elizabeth II.

The House of Commons and the House of Lords perform similar roles in that they are both involved in passing legislation, scrutinising the work of the government and debating current issues.

Members of the House of Lords are mostly appointed by the Queen. A fixed number are elected internally and a limited number of Church of England archbishops and bishops also sit in the House. The House of Lords acts as a chamber of review for legislation passed by the lower house. Prior to the Constitutional Reform Act 2005, the House of Lords was also the highest court in the UK. The Supreme Court of the United Kingdom is now the highest court for all matters under English law, Northern Irish law and Scottish civil law.

Members of the House of Commons are publicly elected. Members of the Commons alone are responsible for making decisions on financial Bills, such as proposed new taxes. The Lords can consider these Bills but cannot block or amend them.

Government

The political party or coalition that wins the most seats in a general election forms the new government, led by its party leader — who becomes Prime Minister. The Prime Minister appoints ministers, including Cabinet members. Government ministers are chosen from the ranks of serving MPs and Lords in Parliament.

At the general election held on 6 May 2010, the Conservative Party, led by David Cameron, won 306 of the 650 seats in the House of Commons. The Liberal Democrats, led by Nick Clegg, won 57 seats. Following the election, the Conservatives and the Liberal Democrats announced a coalition Government with David Cameron as Prime Minister and Nick Clegg as Deputy Prime Minister.

Crown

Along with the House of Commons and the House of Lords, the Crown is an integral part of the British Parliament although the Queen's modern role has become largely ceremonial. Generally, the day after a general election the Queen invites the leader of the party that won the most seats in the House of Commons to become Prime Minister and to form the government. The Queen opens Parliament through the State Opening (marking the beginning of the Parliamentary year). She also dismisses Parliament before a general election at the request of the Prime Minister (dissolution).

Each year the Queen informs Parliament of the government's policies and plans for new legislation in a speech delivered from the throne in the House of Lords. Although the Queen makes the speech it is written by the government. When a Bill has been approved by a majority in the House of Commons and the House of Lords it is formally agreed to by the Crown. Known as the Royal Assent, this turns a Bill into an Act of Parliament, allowing it to become law in the UK.

Devolution

Parliamentary reforms in the UK, referred to as "devolution", have created a number of national assemblies, including a national Parliament in Scotland, a national Assembly in Wales and a national Assembly in Northern Ireland. This process transferred varying levels of power from the UK Parliament to the national assemblies — but preserved authority over the devolved institutions in the UK Parliament itself.

Scotland, Wales and Northern Ireland all held successful referendums on devolution in the late 1990s. This led to the establishment of the separate national assemblies and the democratic election of officials. The Scottish Parliament and the National Assembly for Wales took responsibility for their devolved powers on 1 July 1999, the Northern Ireland Assembly following on 2 December 1999. The Northern Ireland Assembly was suspended at midnight on 14 October 2002. Power was restored to the Assembly on 8 May 2007.

Europe

The UK is one of 27 member states of the European Union (EU) and is subject to EU legislation. One of the roles of the UK Parliament is to scrutinise EU draft legislation and other EU documents and to change UK law to reflect agreed EU legislation and treaties.

In the UK the Scrutiny Reserve Resolutions provide that no UK minister should agree in the European Council of Ministers or the European Council to a proposal that is still 'subject to scrutiny' in the UK Parliament — and if they do, requires them to explain their reasons. The UK Parliament receives copies of EU documents, together with an Explanatory Memorandum prepared by the relevant government department. Documents are considered by the Scrutiny Committees in both the Commons and the Lords.

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ECONOMIC OVERVIEW

The UK was hard hit by the global economic crisis in 2009 and real GDP growth fell by 4.9 per cent. On 20 October 2010, UK Chancellor of the Exchequer, George Osborne, announced the Government’s Comprehensive Spending Review including plans to reduce public spending over the period to 2014-15 and to reduce the deficit from 11 per cent of GDP in 2009-10 to 1.1 per cent of GDP in 2015-16. The UK remains the world's sixth largest economy. GDP growth in 2010 was 1.3 per cent and it is expected to rise to 1.7 per cent in 2011.

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BILATERAL RELATIONSHIP

Australia has a significant relationship with the UK underpinned by our shared heritage, common values, closely aligned strategic outlook and interests. We share a distinguished record of active service and cooperation in conflict zones around the world, including in Iraq and Afghanistan, often in partnership with the United States. We are frequent and regular dialogue partners at the highest levels across government and are like-minded on pressing global issues, including international security, multilateral cooperation and climate change. We share long-standing trade and investment relations and benefit from extensive people-to-people links. Prime Minister Julia Gillard spoke with UK Prime Minister David Cameron by telephone on 7 September 2010 and met him at the G20 meeting in Seoul in November 2010. On 18 January 2011, the Prime Minister hosted a working dinner at Kirribilli House in Sydney for the UK Foreign and Commonwealth Secretary of State William Hague and Defence Secretary of State Liam Fox. The dinner followed the Third Australia-UK Ministerial Consultations (AUKMIN III) which had been held earlier the same day in Sydney.

AUKMIN III

On 18 January 2011, Mr Rudd and Defence Minister Stephen Smith hosted the Third Australia-UK Ministerial Consultations (AUKMIN) at HMAS Watson in Sydney. AUKMIN is the premier bilateral forum for consultations on foreign policy, defence and intelligence matters. AUKMIN aims to generate new ideas and identify ways in which Australia and the UK can work more effectively together to deal with contemporary global challenges. The consultations reflect the closeness of the relationship between Australia and the UK, our aligned strategic outlook and a common commitment to work together in a rapidly changing global environment. UK Foreign and Commonwealth Secretary of State William Hague and Defence Secretary of State Liam Fox visited Australia to participate in the third ministerial consultations, which were held in Australia for the first time. AUKMIN consultations had previously been held in London in 2006 and in Leeds in 2008. At AUKMIN III, Mr Smith and Dr Fox signed the Second Joint Statement on Australia-UK Defence Cooperation and the Australia-UK Strategic Policy Partnership. At the conclusion of the consultations, Ministers released a joint communiqué and agreed to conduct the talks on an annual basis.

At AUKMIN III, Mr Smith and Dr Fox signed the Second Joint Statement on Australia-UK Defence Cooperation and the Australia-UK Strategic Policy Partnership. At the conclusion of the consultations, Ministers released a joint communiqué and agreed to conduct the talks on an annual basis.

Australia-UK National Security Partnership

Australia and the UK agreed on a new bilateral National Security Partnership in March 2009. The National Security Partnership gives further structure and impetus to existing strong cooperation between Australia and the UK on security matters. It provides a strong foundation on which to prepare, not only for traditional security threats, but also for emerging security challenges, such as those posed by climate change, poverty and weak governance.

On 9 March 2011 Australia and the UK signed a Memorandum of Understanding to provide for science and innovation cooperation in support of shared counter-terrorism and national security interests. The MOU will facilitate cooperation between a range of partners including government departments, research organisations and industry.

High level visits

The strength of the Australia-UK bilateral relationship is evident from the large number of high level visits in both directions. Bilateral visits facilitate consultation and cooperation across the broad range of policy issues of common interest.

Visits to the UK

-- The Hon Kevin Rudd MP, Minister for Foreign Affairs, visited London from 11 to 12 June 2011.

-- The Hon Julia Gillard MP, Prime Minister, visited London from 28-29 April 2011.

-- HE Quentin Bryce, Governor General, visited London from 27-30 April 2011.

-- The Hon Kevin Rudd MP, Minister for Foreign Affairs, visited London from 27-28 April 2011.

-- The Hon Catherine King MP, Parliamentary Secretary for Health and Ageing, and Parliamentary Secretary for Infrastructure and Transport, visited London from 2 to 4 May 2011.

-- Mr Graham Peachey, CEO of the Australian Maritime Safety Authority, visited London from 14-18 March.

-- Senator the Hon Mark Arbib, Minister for Social Housing and Homelessness, Minister for Sport, Minister for Indigenous Employment and Economic Development, visited London from 3 to 6 December 2010.

-- Mr Terry Moran AO, Secretary of the Department of Prime Minister and Cabinet visited London from 17 to 20 November 2010.

-- The Hon Anthony Albanese MP, Minister for Infrastructure and Transport, visited London from 3 to 4 November 2010.

-- Mr Roger Wilkins, Secretary of the Attorney-General's Department, visited London from 20 to 25 October 2010.

-- Australia's Special Envoy for Afghanistan, Mr Ric Smith AO PSM, visited the UK from 26 to 29 January 2010, from 24 to 25 April 2010, from 8 to 9 June 2010 and from 15 to 17 October 2010,

-- Mr Dennis Richardson, Secretary of the Department of Foreign Affairs and Trade, visited London from 5 to 8 October 2010.

-- The Hon Tony Abbott MP, Leader of the Opposition, visited London from 2 to 8 October 2010.

-- Senator the Hon John Hogg, President of the Senate, visited the UK from 17 to 23 April 2010 and led a delegation to the UK from 10 to 13 July 2010.

-- Mr Michael Carmody, CEO of the Australian Customs and Border Protection Service, visited the UK from 16 to 20 June 2010.

Visits from the UK

-- HRH Prince William visited Sydney and Melbourne 19 to 21 January 2010 and Queensland and Victoria from 19 to 21 March 2011.

-- UK Foreign and Commonwealth Secretary of State William Hague and Defence Secretary of State Liam Fox visited Australia to participate in AUKMIN III on 18 January 2011.

-- The Rt Hon Lord David Howell of Guildford, Minister of State at the Foreign and Commonwealth Office, visited Australia in August 2010.

-- Then UK Air Chief Marshal, Sir Jock Stirrup, visited Australia in July 2010.

-- Sir Paul Stephenson, QPM, Commissioner of Police for the Metropolis, and Mr John Yates, QPM, Assistant Commissioner, Special Operations, Met Police, visited Australia in March 2010.

People-to-people links

The strength of Australia-UK official linkages is complemented by the depth of people-to-people links, especially travel and migration flows between the two countries. According to Australian Bureau of Statistics figures, 5.5% of Australia's resident population was born in the UK.

The UK is Australia's second largest source of visitors (after New Zealand) with more than 650,000 UK citizens visiting Australia in 2009-10.

Around 950,000 Australians visit the UK each year. Australians represent the 10th largest source of visitors to the UK. There is also a large Australian population resident in the UK. More than 106,000 Australian born citizens currently live there, almost half of them in London.

Bilateral agreements and official dialogue

Australia has many important bilateral agreements (http://www.austlii.edu.au/au/other/dfat/countries) with the UK including in the areas of taxation, health services, criminal investigations and migration. Shared perspectives on the security threats posed by terrorist groups with global reach, weapons of mass destruction, rogue states and our common commitment to the response needed to meet those threats, have given new impetus to our close bilateral dialogue on a wide range of diplomatic, intelligence, military and strategic issues.

Australia joined the UK's newly introduced Youth Mobility Scheme in November 2008, allowing young Australians to continue to be able to visit and work in the UK, subject to certain conditions. UK nationals are able to visit and work in Australia under a Working Holiday Arrangement.

The UK Government has announced changes to its immigration system which affect Australians wishing to live or work in the UK. These took effect in April 2011. The most up-to-date information on UK immigration changes can be found on the UK Border Agency website (http://www.ukba.homeoffice.gov.uk).

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BILATERAL ECONOMIC AND TRADE RELATIONSHIP

Australia and the UK have an extensive economic and trade relationship. The UK is Australia's fifth largest two-way trading partner, our sixth largest export market and our seventh largest source of imports. The UK is also our leading EU trade partner. We have a large commercial presence in each other's country.

In 2010, two-way merchandise trade was worth around A$14 billion, with exports worth A$8.3 billion and imports A$5.8 billion. Gold exports account for 62 per cent of our total merchandise exports to the UK.

Other significant exports include coal with shipments worth A$649 million and alcoholic beverages worth A$528 million.

Significant imports from the UK included medicaments including veterinary (A$943 million), passenger motor vehicles (A$575 million), gold (A$340 million) and printed matter (A$288 million).

Services trade is also important to our bilateral trade relationship. The UK was Australia's second largest services trading partner in 2010. Australia's services exports to the UK were valued at A$4.0 billion and services imports from the UK were valued A$4.4 billion.

Investment

The UK is the second largest source of total foreign investment in Australia. In 2010, total UK foreign investment in Australia was valued at A$473 billion. In 2010, the UK was also Australia's second largest source of direct foreign investment, behind only the US. Direct UK foreign investment in Australia in 2009 was valued at A$52.5 billion.

In 2010, total investment by Australian interests in the UK was worth A$192.3 billion – making the UK Australia's second most important foreign investment destination.

UK investment in Australia

British businesses have traditionally viewed Australia as an attractive base for regional operations and have invested in infrastructure, pharmaceuticals, energy and travel industries. Approximately a third of all regional headquarters operations in Australia are European, and of these almost half are British. Major UK investors in Australia include Shell, BP, British Aerospace, BT and Vodafone.

Australian investment in the UK

Approximately 1,500 Australian companies are active in the UK, with a large number using the UK as a base for continental Europe. Key Australian investors in the UK include: Macquarie, National Australia Group (with Clydesdale Bank, Yorkshire Bank and Northern Bank), AMCOR, Lend Lease, Mayne Nickless, Westpac, the Commonwealth Bank, ANZ, Cochlear, ResMed, CSL, Boral, and dual listed companies GKN Brambles, Rio Tinto, and BHP Billiton.

Notable achievements by Australian companies in the UK include Denton Corker Marshall Architects' win at an international design-competition for the headquarters of the Ministry of Justice in the North West of England — the largest court complex to be built in the UK since the Royal Courts of Justice in London. Oceanlinx, a developer of wave-technology energy, won a bid to use its unique wave energy converter at the UK's Wave Hub, off the coast of Cornwall, to meet the region's requirement to reduce carbon dioxide emissions and use renewable energy sources.

Export opportunities

The wine industry, rather than traditional commodities such as wool and iron ore, has become a major driving force behind Australia's contemporary trade with the UK. The UK is currently our second largest wine export destination. While gold, lead and coal remain significant exports another opportunity area for Australian businesses is fresh produce, including premium fruit, meat and organic produce. Potential also exists for Australian business in e-commerce, for example government-to-citizen and government-to-business portal solutions, government intranet and extranet solutions, web-based transaction systems and online storage and retrieval systems.

For further information see the  Austrade website (http://www.austrade.gov.au/).

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Last Updated: June 2011

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