Defence secretary paves way for spending cuts

LONDON (Reuters) - The new defence secretary on Monday said brutal cuts to defence spending were on the way as part of measures to tackle the country’s big budget deficit.

Defence Secretary, Liam Fox, delivers his speech at the Royal United Services Institute (RUSI) in London June 14, 2010. REUTERS/Stefan Wermuth

Defence Secretary Liam Fox, who took office after a May election, also said Britain must hold its nerve and show patience in the increasingly unpopular war in Afghanistan, where some 300 British troops have been killed in almost nine years.

“I do believe that we have to be very very brutal about getting costs down,” Fox said in a speech at London’s Royal United Services Institute, an influential defence think-tank.

“The analyses show that the future (defence) programme is not affordable if we continue to try to do all the things we already do,” he later said, referring to defence spending planned by the previous Labour government.

The Ministry of Defence (MOD) says its core budget totals about 36.9 billion pounds in the 2010/2011 fiscal year, spending that is ringfenced until the following year.

After that, analysts see the budget as ripe for cuts as Britain tries to tackle an overall budget deficit of around 11 percent of national output.

A Strategic Defence and Security Review (SDSR) due towards the end of this year is expected to herald major reform of the armed forces, strategy and procurement.

Fox has said he would not outline exactly where and how deeply the axe would fall, or how Britain may change its global military stance, until the SDSR was completed.

RUSI director Michael Clarke told Reuters he expected defence spending to be cut by up to 15 percent over the next four years.

“It was a strong speech and he was clearly preparing the ground for some quite unpalatable decisions which the armed forces are going to have to live with,” he said.

Some analysts have said deep short-term cuts in defence spending would harm Britain’s defence capabilities, an outcome Fox said he hoped to avoid by spreading cuts over the long-term.

Fox is currently pushing the treasury to give his department 10 year budget allocations, which RUSI said would allow the defence ministry to plan better.

“It’s not possible to make very big reductions in the defence budget without adversely affecting our capabilities in the short-term. Therefore this has to be a reasonably long-term measure,” he said.

Contractual and structural commitments in personnel and equipment meant there was little room for manoeuvre in the next four years, the usual budget allocation timeframe, Fox said.

On Afghanistan, Fox echoed comments last week by the United States and other NATO allies that the war against Taliban insurgents required patience.

Britain has 9,500 troops in the war and Prime Minister David Cameron last week ruled out sending any more and that existing forces would not stay “a day longer” than necessary.

“Counter-insurgency requires strategic patience ... This is no time to lose our nerve and we must find the language to persuade the British people to stick with us,” Fox said.

The aim of the war is to create a “stable enough” Afghanistan for its people to manage its own security, he said.

Fox outlined state failures, a nuclear-armed Iran, Sunni-Shi’ite Muslim strife, and competition for water and other natural resources as possible future military risks. (Reporting by Mohammed Abbas: Editing by Jon Boyle)