Could Liam Fox be the first cabinet minister to walk out?

Leaked letter reveals high tension between the Defence Secretary and the Treasury over "indefensible

A leaked letter from the Defence Secretary, Dr Liam Fox to the Prime Minister, David Cameron, has exposed strained relationships with the Treasury, which has asked the Ministry of Defence to find 10 per cent savings from its annual £37bn budget.

In the letter, seen by the Daily Telegraph, Fox says that he will refuse to back any serious cuts, stressing the potential to "seriously damage morale" among the armed forces, particularly as cuts would coincide with "a period of major challenge (and, in all probability, significant casualties) in Afghanistan".

Here are some of the key passages:

"Frankly this process is looking less and less defensible as a proper SDSR [Strategic Defence and Security Review] and more like a "super CSR" [Comprehensive Spending Review]. If it continues on its current trajectory it is likely to have grave political consequences for us, destroying much of the reputation and capital you, and we, have built up in recent years. Party, media, military and the international reaction will be brutal if we do not recognise the dangers and continue to push for such draconian cuts at a time when we are at war."

"How do we want to be remembered and judged for our stewardship of national security? We have repeatedly and robustly argued that this is the first duty of Government and we run the risk of having those words thrown back at us if the SDSR fails to reflect that position and act upon it."

Downing Street was keen to downplay the letter, saying that it was perfectly normal for a secretary of state to make "robust" presentations to the Prime Minister. However, the strong wording of the letter is unusual, and the fact that Fox has gone directly to Cameron indicates tensions with the Treasury. It's certainly rather a change of tack from June, when Fox promised to drive through a "major reform agenda" encompassing cuts, "ruthlessly and without sentiment".

Fox appears to be furious at the breach, saying in a statement that he is "extremely angry this confidential communication has been made public" and will "stop at nothing" to discover who is responsible.

Could Fox now become the first to resign from the cabinet? The Daily Mail reported earlier this month that the right-winger was considering stepping down over plans to delay a decision on the renewal of the Trident programme. It is difficult to guage how many concessions will be won by Fox -- remember that there is strong support for protecting defence spending among Tory party members and MPs, so it's possible that enough ground will be ceded to keep him on board. But if it does not go his way when the review reports in October -- and it currently does not look likely that spending at its current level can be retained -- perhaps he will be sufficiently inflamed to take the stand and walk out.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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The three avoidable mistakes that Theresa May has made in the Brexit negotiations

She ignored the official Leave campaign, and many Remainers, in pursuing Brexit in the way she has.

We shouldn’t have triggered Article 50 at all before agreeing an exit deal

When John Kerr, the British diplomat who drafted Article 50 wrote it, he believed it would only be used by “a dictatorial regime” that, having had its right to vote on EU decisions suspended “would then, in high dudgeon, want to storm out”.

The process was designed to maximise the leverage of the remaining members of the bloc and disadvantage the departing state. At one stage, it was envisaged that any country not ratifying the Lisbon Treaty would be expelled under the process – Article 50 is not intended to get “the best Brexit deal” or anything like it.

Contrary to Theresa May’s expectation that she would be able to talk to individual member states, Article 50 is designed to ensure that agreement is reached “de vous, chez vous, mais sans vous” – “about you, in your own home, but without you”, as I wrote before the referendum result.

There is absolutely no reason for a departing nation to use Article 50 before agreement has largely been reached. A full member of the European Union obviously has more leverage than one that is two years away from falling out without a deal. There is no reason to trigger Article 50 until you’re good and ready, and the United Kingdom’s negotiating team is clearly very far from either being “good” or “ready”.

As Dominic Cummings, formerly of Vote Leave, said during the campaign: “No one in their right mind would begin a legally defined two-year maximum period to conduct negotiations before they actually knew, roughly speaking, what the process was going to yield…that would be like putting a gun in your mouth and pulling the trigger.”

If we were going to trigger Article 50, we shouldn’t have triggered it when we did

As I wrote before Theresa May triggered Article 50 in March, 2017 is very probably the worst year you could pick to start leaving the European Union. Elections across member states meant the bloc was in a state of flux, and those elections were always going to eat into the time. 

May has got lucky in that the French elections didn’t result in a tricky “co-habitation” between a president of one party and a legislature dominated by another, as Emmanuel Macron won the presidency and a majority for his new party, République en Marche.

It also looks likely that Angela Merkel will clearly win the German elections, meaning that there won’t be a prolonged absence of the German government after the vote in September.

But if the British government was determined to put the gun in its own mouth and pull the trigger, it should have waited until after the German elections to do so.

The government should have made a unilateral offer on the rights of EU citizens living in the United Kingdom right away

The rights of the three million people from the European Union in the United Kingdom were a political sweet spot for Britain. We don’t have the ability to enforce a cut-off date until we leave the European Union, it wouldn’t be right to uproot three million people who have made their lives here, there is no political will to do so – more than 80 per cent of the public and a majority of MPs of all parties want to guarantee the rights of EU citizens – and as a result there is no plausible leverage to be had by suggesting we wouldn’t protect their rights.

If May had, the day she became PM, made a unilateral guarantee and brought forward legislation guaranteeing these rights, it would have bought Britain considerable goodwill – as opposed to the exercise of fictional leverage.

Although Britain’s refusal to accept the EU’s proposal on mutually shared rights has worried many EU citizens, the reality is that, because British public opinion – and the mood among MPs – is so sharply in favour of their right to remain, no one buys that the government won’t do it. So it doesn’t buy any leverage – while an early guarantee in July of last year would have bought Britain credit.

But at least the government hasn’t behaved foolishly about money

Despite the pressure on wages caused by the fall in the value of the pound and the slowdown in growth, the United Kingdom is still a large and growing economy that is perfectly well-placed to buy the access it needs to the single market, provided that it doesn’t throw its toys out of the pram over paying for its pre-agreed liabilities, and continuing to pay for the parts of EU membership Britain wants to retain, such as cross-border policing activity and research.

So there’s that at least.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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