Dr Fox said he was committed to two things. Firstly to play his part in improving the country’s fiscal position and he said his second commitment is:
To ensure that in this rapidly changing and dangerous world, and in this tough fiscal climate, the UK has appropriate defences for the threats we face.
I am determined to ensure the UK retains robust and well equipped Armed Forces capable of intervening abroad where necessary to protect our security and interests at home.
That would mean, when the national interest demands, maritime-enabled power projection, the capacity to control air-space to guarantee freedom of manoeuvre and the ability to deploy land power with the logistical strength to sustain it.
However, Dr Fox said:
The current Defence programme is entirely unaffordable, especially if we try to do what we need to do in the future while simultaneously doing everything we have done in the past.
Dr Fox said these are the unavoidable realities which govern the Strategic Defence and Security Review adding:
The fiscal realities will unavoidably limit the amount of money the Government has available for Defence procurement in the years ahead.
So in this austere climate, to ensure this process is not detrimental either to our national security or to the prospects of one of our most profitable and successful industries, the Government is looking to find new ways of encouraging business. So there is a deal here to be struck.
The British Government will support the UK Defence Industry as a strategic asset; we will support the drive for exports with an active and innovative programme of Defence Diplomacy.
We will ensure that our licensing system works efficiently while ensuring responsible exports.
We will develop innovative training and exercise support in conjunction with industry.
We will ensure that our own requirements for new equipment are designed from their inception with exportability in mind.
We will continue to ensure a dedicated focal point for Government support to exports, and let me pay tribute to the achievements the UKTI Defence and Security Organisation.
We will reform our acquisition processes and provide our suppliers with increased clarity and predictability including a 10-year planning horizon agreed with the Treasury, audited by the NAO every year.
And I am pleased to confirm that a new Defence Industrial Strategy will be published after the SDSR has concluded.
Dr Fox said that as part of the Strategic Defence and Security Review work there are three things that must be understood between the government and industry:
First, without cost containment in the current programmes we have no option but to either cut the programmes currently underway or curtail investment in future programmes.
Second, we must reduce fleet numbers that provide any one capability because we cannot afford the luxury of multiple supply chains and the associated training and infrastructure costs.
Third, too often in the past we have simply replaced old platforms with an upgraded version of the same sort of equipment.
If we continue to spend money on the next generation of what we already have, we will never give ourselves the opportunity to reshape expenditure plans to take into account the need to invest in the technology that is necessary to maintain our advantage in the constant battle for the upper hand in national security.
So we will all need to think differently - and this is part of my challenge to you today.
We need to make a conceptual leap and develop new capabilities that help us stay ahead of our opponents - particularly when faced with asymmetrical threats.
We need to think carefully about what the 21st century battle space requires.
See Related Links to read Dr Fox’s speech at Farnborough in full.