Britain will remain a major power, says Defence Secretary

Britain will remain in the "premier league" of military powers despite the swingeing cuts facing the armed forces, Defence Secretary Liam Fox said today.

Dr Fox said the Government was committed to maintaining the UK's global influence ability to project power around the world.

However, he insisted that to be effective, military power had to be underpinned by economic power and that the Government had been right to make tackling the deficit its priority.

Addressing the Chatham House foreign affairs think tank in London, he warned that further cuts were inevitable as ministers grappled with the need to get the public finances in order.

His intervention comes amid a groundswell of concern among senior military figures over the impact which the cuts in last year's Strategic Defence and Security Review will have on Britain's standing.

The heads of the Army, Royal Navy and RAF told the Commons Defence Committee last week that the UK could no longer aspire to the "full spectrum" of military capabilities in the wake of the SDSR.

Yesterday, Air Chief Marshal Lord Stirrup, who was head of the armed forces at the time of the SDSR, told the same committee the UK faced a period of "strategic shrinkage" with no guarantee resources would be available to rebuild the military after 2015 as planned.

Dr Fox, however, insisted that it would be the failure to deal with the deficit which could "set off a ticking time bomb that, if not defused, will inevitably result in strategic shrinkage".

He said that the SDSR was designed to ensure that Britain's future military power was built upon "a sound economic base".

"The Strategic Defence and Security review has ensured that we will remain in the premier league of military powers. It is not an agenda for retrenchment, it's an ambitious agenda of transformation," he said.

Tackling the crisis in the public finances was, he said, not just a matter of economics but an issue of national security.

"It is central to sustaining, in the long term, Britain's reach, military power and influence," he said.

"Relative economic power is the wellspring of strategic strength. Conversely, economic weakness debilitates every arm of government.

"Structural economic weakness, if not dealt with, will bring an unavoidable reduction in our ability to shape the world."

Dr Fox signalled that further cuts were in the pipeline, saying that while the SDSR had made "substantial inroads" into the Ministry of Defence's £38 billion budget deficit, "there is still more to be done".

"Staying the course will require sustaining the strict cost-control regime I have put in place at the MoD. This will inevitably require that tough decisions are taken on a regular basis to keep the budget on track," he said.