Another curve ball we got today. We spoke with some friends who are UK citizens but haven't got UK passports. They've been in and out of the country numerous times on their Australian passports. They shouldn't be doing this should they? They had no idea it might not be allowed.
From one of the gov.co.uk links above, they should be using a British Citizen passport. They likely relied on the fact that Australia is one of the very many countries, where the UK allows their citizens to ask for entry to visit at the border and therefore the airline allows them to board a flight to the UK. I can't see how they will be able to board a flight to the UK with an Australian passport, when Australia is added to the UK list of their citizens needing an ETA?
Nor will they be able to apply for an ETA to be able board a flight to the UK because they are British Citizens.
I doubt they are the only ones doing this and they probably didn't take note of the Borders and Nationality Bill (then became an Act), which as you can read on the links above, brought in the ETAs from this year. These ETAs were also in the March 2023 Statement of Changes to Immigration Rules and mentioned on this site
https://talk.uk-yankee.com/index.php?topic=100713.0Good idea that your wife is going to apply for a British Passport ASAP. The change to e-visas from a paper system and BRPs, a wet ILR stamp in an old passport or a vignette, will also likely make many who were happy to remain on ILR for years, apply for British Citizenship and then get a passport. The UK is going digital and a British Citizen passport is much easier to show airlines, landlords, the benefit agencies etc.