Losing a defence secretary was not the only obstacle in a surreal week for the Prime Minister
David Cameron speaks to the press at Charlbury Station in his constituency
By By Patrick Hennessy and Sean Rayment
7:30AM BST 16 Oct 2011
It was, in the words of one Downing Street aide, “the weirdest possible end to a very weird week”.
David Cameron found himself carrying out a government reshuffle by mobile telephone in an area with such poor reception that his calls to the ministers he was trying to appoint kept cutting out.
To add a particularly surreal twist, at one stage the Prime Minister was making calls while morris dancers, in full bells-and-sticks regalia, were performing around him at an event in his Oxfordshire constituency on Friday afternoon.
The reshuffle was necessary, of course, because of the resignation of Dr Liam Fox as defence secretary. Dr Fox had told Mr Cameron of his intention to step down in a 2.30pm call – one that No 10 sources insisted they were not expecting.
“Genuinely, we were not planning for this,” a key adviser to the Prime Minister said this weekend. “David was quite content to wait for the report by [Sir] Gus O’Donnell [the Cabinet Secretary]. It was Liam’s decision to resign when he did. David asked him: 'do you really want to do this?’.”
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At lunchtime on Friday, Ed Llewellyn, the Prime Minister’s chief of staff, had been for a meeting with Dr Fox at the Ministry of Defence – but government sources insisted his resignation had not been on the agenda for the talks.
Mr Cameron’s lack of preparedness, sources close to him insisted, resulted in the chaotic scenes as he attempted to contact replacements for Dr Fox and Philip Hammond, the former transport secretary who has now been installed at the MoD.
Already that morning the Prime Minister had woken to the news that his Cabinet Office minister, Oliver Letwin, had been in the habit of disposing of his constituency correspondence in a bin in St James’s Park, close to Downing Street.
“Just when you thought the week couldn’t get any stranger, it did,” the No 10 aide said, adding that parts of Mr Cameron’s Witney constituency had terrible mobile coverage. “Every time we’d be calling someone offering them a job, the line would go.
“At one stage some morris dancers turned up.”
The Charlbury morris dancers, whose traditional craft, they boast, includes “wild whooping”, were joint top of the bill with the Prime Minister at an event to mark the upgrade of the local rail line.
As well as Mr Hammond, beneficiaries of the chaotic reshuffle included Justine Greening, promoted into the Cabinet from economic secretary to the Treasury to take over at the Department for Transport, and Chloe Smith, a backbencher who first came to Parliament in a by-election just two years ago. She was given Miss Greening’s old job.
The reshuffle was applauded in some quarters of the Conservative Party for its promotion of Miss Greening and Miss Smith – moves that helped address the issue, exposed by poll findings, of Mr Cameron and his government appealing much more to men than to women.
Miss Greening is a qualified accountant who entered Parliament in 2005 (and supported Dr Fox in that year’s leadership election) while Miss Smith is only 29 – and deals with questions about her youth with the response: “If you’re good enough you’re old enough.”
However, the departure of Dr Fox annoyed some on the Right, who protested that their wing of the party was now badly under-represented at Cabinet level. Peter Bone, a Right-leaning backbencher, said that there should be a wider reshuffle to redress the balance – a suggestion unlikely to be taken up by the Prime Minister.
Some on the Right of the party wanted Dr Fox’s job to go to Owen Paterson, the Northern Ireland Secretary, while others were hoping that Chris Grayling, widely thought to have been doing an effective job as employment minister, would be promoted into the Cabinet.
Other supposed candidates for defence secretary – including David Davis, the former shadow home secretary, and Sir Malcolm Rifkind, the former foreign secretary – were never seriously on the Prime Minister’s radar, The Sunday Telegraph understands.
The Downing Street view of Dr Fox this weekend – notwithstanding the former rivalry between him and Mr Cameron for the Conservative leadership in 2005, and accusations that Dr Fox was trying to run a “parallel foreign policy” through the activities of his informal adviser and best man Adam Werritty – was that the former defence secretary was an “honest man who has been naive”.
Sources were also at pains to point out that Dr Fox had been an effective defence secretary who had made a good start in dealing with a funding crisis bequeathed, according to them, by the last Labour government.
One such success can be revealed today by The Sunday Telegraph for the first time.
Earlier this year Dr Fox obtained the promise from the Treasury of an extra £3.9billion funding for the period covered by the Strategic Defence and Security Review (SDSR) concluded last year, 2011-2015. The money enabled him to go ahead with some crucial orders – including 14 Chinook helicopters for use in Afghanistan – as well as a big boost for the Territorial Army and the fight against cyber crime.
Without the £3.9billion the SDSR would have to have been reopened – which would have been a political catastrophe for the Coalition. The agreement was already a tough one – including the scrapping of Britain’s single aircraft carrier, the Ark Royal, the removal from service of Harrier jets, and thousands of lost jobs in all three branches of the Services.
When Mr Fox’s team examined the books at the MoD, however, they found a whole set of anomalies including, allegedly, that the order for Chinooks, assumed to have been placed by the Labour government, had not been taken out at all. They faced having to reopen the SDSR with the possibility of further lost jobs and cancellations of equipment and hardware.
Asked exactly where the extra £3.9billion agreed by George Osborne had come from, MoD sources redirected the question to the Treasury. In fact, it is understood that the money will come partly from the Treasury’s reserve – which is meant only to be drawn on in times of crisis such as war – although some is almost certain to come, controversially, from savings made by other departments in Whitehall.
Last night Dr Fox’s friends circulated a five-sheet summary of his “achievements at the MoD”. These included continuing the Trident nuclear programme, extra money for reserve forces, big reforms to unwieldy and expensive procurement programmes and placing the Armed Force Covenant in law for the first time.
The MoD remains, however, one of Whitehall’s financial horror stories – and it is primarily for this reason that Mr Cameron has installed Mr Hammond, who as well as being the proverbial “safe pair of hands” has an acute financial brain, honed during a successful career in business and industry before he was elected as an MP.
The MoD’s budget is £35 billion a year, and its combined civilian and military workforce numbers more than 250,000. To complicate matters it is run by civil servants and generals who speak their own acronym-rich language.
The chances are that by lunchtime tomorrow Mr Hammond will have been briefed on the wars in Afghanistan and Libya by the CDS, the VCDS and the CNS, who, incidentally, is also the First Sea Lord, CGS, the CAS, the CJO, and DSF.
He will be told of the differences between a typhoon and a tornado, and a mastiff and bulldog. In the Armed Forces a lynx is a helicopter, but a jackal is a vehicle, rifles are not guns, submarines are boats and Royal Marines are not soldiers. And, perhaps most importantly of all, British troops only ever withdraw and never retreat.
Britain’s Armed Forces are a minefield of customs, traditions and structures, knowledge of which will have to be mastered by the MoD’s new incumbent in a matter of days if he is to be taken seriously by those who matter.
It is a tough ask. Speaking on the BBC on Friday night, Gen Sir Mike Jackson, a former head of the Army, reckoned that it would take a new secretary of state at least a year to get to grips with his brief.
In a matter of days, by contrast, Mr Hammond will have to put his name to a document that will spell the end of some of the Army’s most historic infantry regiments – always a contentious act and one destined to provoke an outpouring of criticism by MPs from all parties.
Dr Fox prided himself on his ability to take tough decisions, but the Libyan conflict almost immediately revealed the relative wisdom of some of those – such as having an aircraft carrier without aircraft. It is certain that future strategic shocks will reveal many more weaknesses in Britain’s defence.
A White Paper on defence technology, equipment and support is due to be published next month and a separate report on the restructuring of the MoD’s procurement arm – Defence Equipment and Support – is expected in December, the details of which Mr Hammond will have to master very quickly.
Dr Fox’s cool approach to European co-operation beyond the trumpeted Anglo-French accords of 2010 served to alienate some of the UK’s key European partners – while pleasing the large number of Eurosceptic Tory MPs. Whether UK policy on this and other matters will change course hinges on the views of Mr Hammond.
The new Defence Secretary inherits a department that is effectively bankrupt, and morale amongst troops and civil servants alike is low and falling.
The loss of Dr Fox is in many ways a severe blow. He departs with a wealth of knowledge which will take many years to replace. He swept into the MoD in a whirlwind of reform, unafraid to make enemies and rightly describing the department as “dysfunctional”.
After 16 months of Dr Fox’s reforms, critics still believe the MoD is a dysfunctional and wasteful organisation and is likely to remain so for the rest of this government. Dr Fox had started a programme which would take five – possibly 10 – years to complete with no guarantee of success.
One source said: “When Fox was in opposition he would often talk of a the endless reforms he was going to introduce which would radically transform the MoD.
But the reality was that when in power he found that the changes would take time, a lot of time.
“It isn’t just the culture of the MoD which needs changing but the organisation’s relationship with the international defence industry – and that will take a lot of time.”
As well as giving stick, the former defence secretary also offered the carrot and told his beleaguered defence chiefs that he was happy to fight their battles with both the Treasury and Prime Minister to ensure that the military remained a capable force.
In the past 17 months his willingness to fight for the military changed the perceptions of senior officers and officials.
One senior defence source told The Sunday Telegraph: “He was a loner and slightly detached. He was headstrong and would often refuse to listen to advice but he loved the job and was fascinated by the Armed Forces and that shone through.
“When the time came to slog it out with the George Osborne he fought ferociously and won the battle – above all else that was probably his greatest victory. He managed to keep far more money in defence than anyone expected.”
Dr Fox had dared to go where no one has gone before in terms of attacking the problems which led to the creation of a £38 billion black hole.
But like a supertanker the MoD will take a long time to change its course.
Aides describe Dr Fox as extremely stubborn and bloody-minded – the very characteristics that saw him get into severe trouble in the Werritty affair – but he had a vision which many admired and demonstrated an obvious affinity with the men and women of Britain’s Armed Forces.
Whether or not Mr Hammond is able is to prove an able successor will go a long way to determining his own future political career. It will also be of crucial importance to Mr Cameron and his entire government.
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