Conservatives eye big changes to armed forces

LONDON (Reuters) - Britain's armed forces face huge change if the Conservative Party wins next week's general election, with an "unsentimental" review set to prompt "tough decisions," the party's defense spokesman said on Thursday.

With politicians under pressure to slash Britain's 163 billion pound ($248.5 billion) budget deficit but promising to protect spending on education or health, the armed forces are a prime candidate for cuts despite the war in Afghanistan.

The center-right Conservative Party has consistently led opinion polls ahead of the May 6 ballot, and defense spokesman Liam Fox said the party would immediately initiate a six month strategic defense review (SDR) should it gain power.

"The SDR needs to be a step change review, not an incremental review. It also has to be unsentimental," he told Reuters in an interview at his party's London headquarters.

"It will mean eventually that we will have to make some pretty tough decisions, about what we do and what we don't do and about who we do things in conjunction with," he said.

The Royal United Services Institute (RUSI) think tank in London has said the most optimistic scenario would mean the Ministry of Defense could face a cut in its budget of around 11 percent in real terms over the six years to 2016/17.

Deep cuts to overall spending are expected whoever wins the closely contested election.

Fox would not be drawn on where and how deeply the defense budget, which totals about 50 billion pounds in the 2010/11 fiscal year, may be cut, saying that defense spending would be ring-fenced for the Conservatives' first year in power.

But he stressed that equipment procured in future would have to be adaptable, making it easier to export and help boost the sluggish economy, one of the key issues of an election dominated by a budget deficit running at more than 11 percent of GDP.

"I would like us to produce something that is simpler, and adaptable that we can add capability to ourselves, but is flexible enough to be exported to other places."

TERRORISM THREAT

The main parties' defense spokesmen have all agreed threats to Britain may come from a variety of fronts, making an adaptable military important.

The last major review was in 1998, and since then Britain's military has taken part in wide range of operations such as counter insurgency operations in Iraq and Afghanistan, anti-piracy missions in the Indian Ocean and peacekeeping in Bosnia and Sierra Leone.

Fox identified "transnational terrorism" and nuclear proliferation as the biggest threats facing Britain today, which will necessitate a rethink of how the UK arms itself.

"The first thing we have to decide is how we shape the armed forces for the threats of the future and not the legacies of the past. And so you would need to be asking whether we needed so many main battle tanks, whether we needed some of the heavy artillery, for example," he said.

Although defense spending cuts are widely expected, the Conservatives may spend more on ships, with Fox saying that their number, which include 25 principal surface combat ships, had been reduced to an unacceptable level.

"I think that most reasonable analysts would suggest that the number of ships in the surface fleet is too small now for the tasks that we require of the navy. We've got too few ships."

Fox declined to comment on how the size of the military would change after the SDR, but said it would be scrutinized to see whether it was too "top heavy" with too many senior posts.

On Afghanistan, where Britain has some 9,500 troops fighting with NATO forces against Taliban militants, Fox said he expected the UK to be able to begin reducing troop levels in four years.

"I would think that by the end of another four years you would want to see a paradigm shift in Afghanistan, meaning that we've transferred security over to the Afghans, and we are there simply to mentor and support them, rather than being the security forces ourselves," he said.

(Editing by Elizabeth Fullerton)