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Liam Fox: Labour's economic policies were a national security liability

Let me begin by saying what a privilege it is to address you as Secretary of State for Defence.

Not a day has passed since my appointment when I have not felt truly honoured to be working with the men and women of our Armed Forces and those who support them. 

I have witnessed the bravery of those fighting on the front line. I have been humbled by the determination and lack of bitterness by those recovering in Headley Court and Selly Oak-now the Queen Elizabeth Hospital. 

I have been touched by the dignity of the wives and mothers and fathers and families who have lost those they loved.
 And I have marvelled at the sheer resolve of those such as the mothers of the Afghan Heroes Charity who turned their grief at losing their sons into a stunning project to help others.
If we are looking for role models in our Big Society we need look no further than our Armed Forces and their families.
As everyone knows it is not an easy time to be at the Ministry of Defence.
You should see what Labour left behind.
No defence review for more than 12 years.
A ₤38bn black hole in the defence budget.
A military covenant in need of repair.
An MoD in need of radical reform.
Luckily, I'll be tackling these problems alongside some of the best Ministers in the Government- Nick Harvey, Gerald Howarth, Peter Luff, Andrew Robathan, and Lord Astor. And my PPS Tobias Ellwood and our defence whip Mark Francois.
The main focus for all of us is naturally Afghanistan.
After nine years it can be easy to lose sight of why we are there.
I want you to remember where you were when you first heard about the attacks on 9-11.
Who can forget those pictures of planes smashing into the Twin Towers?
Of people jumping out of the building to their certain death to avoid the raging fire.
Or the images on live television of the towers collapsing killing almost 3,000 innocent people from over 50 countries, including 66 British citizens.
It was an attack not just against people or property, but against a whole way of life; not just against the United States, but against all free peoples.
The carnage did not discriminate between nationality, colour or religion.
It is what trans-national terrorism looks like.
It was in Afghanistan that al-Qaeda, hosted by the Taliban regime, prepared and trained for its campaign of global terrorism.
Campaigns that have affected, and continue to threaten, the entire globe. From Bali to Kenya. From London to New York. From Madrid to the Horn of Africa. 
This is why our mission in Afghanistan is first and foremost about national security.
We haven't always had it right in Afghanistan. Mistakes have been made along the way.
But we now have the right strategy in place.
We now have the right number of troops in theatre with the right equipment. 
And we will soon agree a plan for transition to the Afghan Government. 
We now have to be patient and let the strategy run its course.
We also need to set realistic expectations about what we are trying to achieve. We are not there to create a perfect society.
Our objective is to have a stable enough Afghanistan, able to manage its own internal and external security, so that the international community can leave without the fear of creating a security vacuum.
The Afghans are not yet able to secure their own territory without the presence of coalition troops but they are making real progress.
The training of the Afghan Security Forces is on track and ahead of schedule. This is why British troops will not have a combat role after 2015.
People ask, why not leave now? Just walk away.
The answer is that we are part of an international coalition of 47 countries. To leave before we completed our task would be a shot in the arm to violent jihadists everywhere.
It would send the signal that we did not have the moral resolve and the political fortitude to see through what we ourselves have described as a national security imperative.
And it would be a betrayal of our forces who have already sacrificed so much.
Our military presence is necessary.
But what we seek cannot be accomplished by military means alone. We have to help the Afghan government develop at a national and a local level, to show that it can offer a better future than the Taliban.
We must encourage the reintegration and reconciliation process. After all, counterinsurgencies usually end with a political settlement.
If we do not maintain the effort on all fronts-military, political and development- we will not reverse the momentum of the insurgency.
This is why William Hague, Andrew Mitchell and I made a joint visit to Afghanistan in the early days of the new Government.
With this visit, we did in nine days what the previous government never managed in nine years.
It is fashionable to be pessimistic about Afghanistan but there is real progress being made.
In Lashkar Gah, the capital of Helmand, the security situation has been transformed.
The civilian airport is open with three flights a day to Kabul.
The poppy harvest is down and the bazaars are open for business.
But we must not see Afghanistan as just being Helmand. Although most of the fighting takes place there only 3.5 per cent of the whole population of Afghanistan live in Helmand.
We are part of a wider coalition effort, and we need to see Afghanistan and what we are doing there in the round.
Many places from Herat in the west to Konduz in the north are stable and prosperous. We need to start focusing on our successes and not just our difficulties.
But while Afghanistan is our main priority it isn't our only priority.
The fight against international terrorism will not end there. There are other areas like the Horn of Africa and Yemen where terrorists continue to operate.
 We have the risk of nuclear proliferation and the ongoing fight against piracy. 
We face challenges in new domains such as cyber and space.
And will have the security risks associated with natural disasters and climate change.
Considering all of this we must ask ourselves what role we want the UK to play in this increasingly dangerous and complex world.
As the Prime Minister has repeatedly said, the first duty of Government is defence of the realm.
That is why we will maintain Britain's nuclear deterrent and will go ahead with the trident replacement programme.
After 12 years without a defence review, when our armed forces have at times been overstretched, with equipment overused or out of date, and in our dreadful economic and financial circumstances, it is clear that change must come.
The strength of our process is that it is a cross-government Defence and Security Review, run by the newly created National Security Council.
This is in recognition of how issues like foreign relations, international development, and homeland security require joined up thinking if we are to both protect our own citizens at home and contribute to global security abroad.
This is something the previous Government never fully understood and certainly failed to deliver. 
Exacerbating the challenges of the review is the bleak financial situation left behind by Labour.
The country's finances are wrecked and the world is more dangerous than at any other time in recent memory. Never has a defence review been carried out under such extreme circumstances.
We all know about Labour's toxic economic legacy.
There is an unfunded liability in Defence of around £38 billion over the next 10 years - compared to an annual budget of only £37 billion.
Under Labour the United Kingdom's national debt has doubled. The interest we will pay next year on this debt is £46bn. And what do we get for this? Absolutely nothing.
Let me tell you what you could buy in defence for £46bn.
This would be enough to purchase an extra 4 aircraft carriers, 10 destroyers, 50 C17s cargo planes, 300 Chinooks helicopters, fund13,000 extra soldiers and still have enough left over to revolutionise forces accommodation.
If we learned anything from the Cold War it was that the stronger your economy the better your national security. We defeated the Soviet threat because we prevailed in the ideological battle and because of the strength of the Western economies.
Today, we find ourselves in the appalling situation where the out going Labour Chief Secretary actually leaves a note that says "Sorry, there is no money left". 
Now, I didn't come into politics wishing to see a reduction in our Defence budget.
Neither did the Prime Minister.
But while we can never predict where events will take us or the unavoidable bills we will have to pay as a consequence, we must confront the ghastly truth of Labour's legacy.
During their time in office Labour pushed projects ever more desperately into future years to try to make an impossible budget balance in year, only to increase the overall cost of the Defence programme still further.
They behaved like out of control online shoppers who kept ordering more and more without once considering how they might pay for them when the goods arrived.
And they did all of this during a time of war.
New Labour was the most short sighted, self serving, incompetent, useless, and ineffective government that Britain has ever known.
Make no mistake, Labour's economic policies were a national security liability.
So we face the SDSR with unavoidably constrained finances, but with a clear role of Britain's place in the world.
During the defence review the papers have been full of stories about the number of tanks, planes and other equipment programmes. But it is our people, the men and women of our Armed Forces, who are our greatest asset.
Without them, there is no defence of the realm.
When I visit forces, whether at home or overseas, and see first hand their motivation, their spirit, and their determination I am reminded how important it is to rebuild the Military Covenant left shattered by Labour.
One of our first actions was to double the operational allowance for those serving in Afghanistan to over £5,000 for a six month tour.
We have also changed the rules on Rest and Recuperation to allow those who have lost days from their R&R to be compensated with extra days during their post-operational leave.
As David Willetts announced on Monday children of those killed on operations since 1990 will be eligible for free scholarships for higher education.
My colleague Andrew Murrsion has done a wonderful job looking at ways we can improve mental health care for those in our armed forces and our veterans.
We will be taking forward work on Andrew's proposals, but due to the urgency of this issue, I am pleased to announce that we will put into place two of his key recommendations immediately:
a dedicated 24 hour support line for veterans and introducing 30 additional mental health nurses in Mental Health Trusts to ensure the right support is organised for veterans.
As I said before, Labour's legacy means that there isn't enough money to do all that we would wish. But we can make a start.
So I can also announce new funding to replace 125 Service Families Accommodation Units on Canadian Estate at Bulford with 260 new units at a cost of £47m.
It's not much, and I wish I could do more, but it's a step in the right direction to better housing for our service personnel and their families.
From the establishment of the Military Covenant Commission to the publication of the Armed Forces Manifesto during the campaign the Conservative Party has led the way on championing the welfare of our troops, their families and our veterans.
Rebuilding the Covenant will be a process and not an event. It will not be done over night but at least we are now on the right path.
Labour's legacy means we will not be able to do all that we would like, at least not in the short term. But we will create greater stability that will allow the military and the defence industry to plan with greater certainty.
We will radically reform the MoD so that more resources go to the front line. Regular defence reviews will mean less upheaval, responding more quickly to the changing nature of the threats we face.
Whatever the frustrations and whatever the difficulties I am determined that no future defence secretary will inherit the shambles that I have inherited from Labour, and that our national security will take its proper place in the country's political priorities.
Above all we will keep our promise to rebuild the military covenant; not just between the Government and our Armed Forces but between all the British people and our Armed Forces. There should be no place for those who refuse to serve those in military uniform, in petrol stations, in shops, or pubs. And when those small but nasty minorities turn out to abuse our returning troops we should ensure that they are swamped with well-wishers cheering our heroes on.
To all those who serve in our Armed Forces, to all those who have served in the past, and to all of the families that support them, I send a simple message from all of us to all of you - thank you. We will not let you down.

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