:00:12. > :00:16.After the worst week of his political life, Liam Fox decided he
:00:16. > :00:21.had to go as he admits blurring personal interests and government
:00:21. > :00:23.activities. We have new revelations about his friend Adam Werritty's
:00:23. > :00:28.business links. The Shadow Defence Secretary Jim Murphy with the Tory
:00:28. > :00:32.MP who says Dr Fox should not have quit. General Sir Mike Jackson will
:00:32. > :00:38.discuss the effect of having six defence secretaries in six years.
:00:38. > :00:41.At a time of big military cuts and two major conflict, we'll examine
:00:41. > :00:45.Liam Fox's legacy at the MoD. Also tonight, how will the Tory right
:00:45. > :00:54.react to losing one of their favourite sons and we'll discuss
:00:55. > :00:58.where this leaves the Coalition and David Cameron.
:00:58. > :01:02.Good evening. There's an old saying among military medics about being
:01:02. > :01:05.wounded in combat, if it looks bad, it is bad. The day by day
:01:05. > :01:08.revelations about Liam Fox and his friendship with Adam Werritty
:01:08. > :01:12.looked increasingly bad throughout the past week and that meant they
:01:12. > :01:15.were bad. Today Dr Fox decided he'd had enough and quit his job to be
:01:15. > :01:18.taken now by Philip Hammond, the Transport Secretary. We'll get to
:01:18. > :01:21.the long-term political and military implications in a moment,
:01:21. > :01:25.but first, David Grossman is here with Higgs insights into what
:01:25. > :01:30.happened today and why. It looked increasingly inevitable,
:01:30. > :01:33.didn't it? I think that's a fair assessment. This has been one of
:01:33. > :01:37.the more inevitable resignations from the Cabinet in modern times,
:01:37. > :01:41.ever since the bare facts of this were known. I think all that was
:01:41. > :01:44.really delaying the departure was David Cameron's understandable
:01:44. > :01:49.reluctance to lose a Defence Secretary at a time of war and take
:01:49. > :01:53.the inevitable political hit that comes from losing any Cabinet
:01:53. > :01:58.minister. But what happened day after day has been that Liam Fox's
:01:58. > :02:03.story, or his account of what was going on has simply unravelled. At
:02:03. > :02:06.the beginning we were told these 41 meetings with Adam Werritty who
:02:06. > :02:10.had's been his bestman were simply friends getting together to chew
:02:10. > :02:14.over stuff. Now, over the days, a more complex picture has emerged.
:02:14. > :02:19.Today one of the donors who provided money for Adam Werritty
:02:19. > :02:22.says that it was Liam Fox who solicited those donations. The
:02:22. > :02:26.Cabinet secretary is looking at this matter and is about to report.
:02:26. > :02:28.I understand that one of the factors that tipped Liam Fox
:02:28. > :02:32.towards resignation is the knowledge that that assessment by
:02:32. > :02:35.the Cabinet secretary was going to be very critical. At the moment,
:02:35. > :02:42.when he resigned it was his decision but he knew it wasn't
:02:42. > :02:47.going to be his decision for much longer.
:02:47. > :02:50.There aren't many more important jobs in government, political
:02:50. > :02:54.oversight of the Armed Forces, defending the realm. What Liam Fox
:02:54. > :02:59.couldn't survive, though, was the impression that he was also at the
:02:59. > :03:03.same time running a parallel department.
:03:04. > :03:08.REPORTER: Is sorry enough? It's not like he didn't do his best to hang
:03:08. > :03:13.on, he even apologised. I accept that mistakes were made and I
:03:13. > :03:20.should not have allowed the impression of wrong-doing to arise.
:03:20. > :03:22.I'm very sorry for that. When that didn't work, well, he
:03:22. > :03:25.apologised again. I am sorry for this, I have apologised to the
:03:25. > :03:31.Prime Minister, to the public and at the first opportunity available
:03:31. > :03:41.to the House. Today there was no sign of the Defence Secretary, just
:03:41. > :04:06.
:04:06. > :04:10.a whole load of rumours and then, I think if you look back at the
:04:10. > :04:14.events of the week, I think he's reached the right decision. I'm
:04:14. > :04:17.reluctant in that conclusion because I think he'll be a big loss
:04:17. > :04:20.to the MoD but when the story becomes as persistent as it has
:04:20. > :04:23.become, it does become a real distraction for the department
:04:23. > :04:26.concerned. I agree with his analysis that it was probably
:04:26. > :04:30.better for him to step aside and avoid disrupting the very important
:04:30. > :04:35.work of the Ministry of Defence and our Armed Forces. Outside the MoD
:04:35. > :04:39.statues of heroes, Monty, of course, who did for the Desert Fox.
:04:39. > :04:43.What did for the Liam Fox? Forget all those complicated floep charts
:04:43. > :04:47.showing money going from that individual to that organisation, or
:04:47. > :04:51.that meeting and that obscure foreign location. What really did
:04:51. > :04:54.for him was the perception that even as Secretary of State for
:04:54. > :05:00.Defence, even in charge of the MoD here, he was, at the same time,
:05:00. > :05:03.running a sort of freelance policy operation beyond the control of the
:05:03. > :05:08.Government. The facts emerged slowly. The
:05:08. > :05:14.bestman at Dr Fox's wedding, Adam Werritty, we found out visited him
:05:14. > :05:19.at his office 22 times and on overseas visits 19 times, all since
:05:19. > :05:23.the last general election. Why? And who was paying? It appears
:05:23. > :05:26.it was political donors seeking to influence policy. Ministers have
:05:26. > :05:29.always had as it were groups of people who work for them on the
:05:29. > :05:33.side, people they mix with in Parliament, groups that they kept
:05:33. > :05:37.in touch with. That's perfectly acceptable if these things are open
:05:37. > :05:41.and they're understood. It's the gaining private advantage through
:05:41. > :05:45.public office of the minister that is wrong. It is deeply suspicious.
:05:45. > :05:48.Even if nothing wrong was happening, ie, no money was being made, no
:05:48. > :05:52.secrets were being given away, the rules are pretty clear. Just the
:05:52. > :05:56.perception of wrong-doing is wrong because it's against the public
:05:56. > :05:59.interest. Mr Werritty had been using a business card describing
:05:59. > :06:04.himself as an advisor, but crucially, he didn't have any
:06:04. > :06:07.official status. He did, though, arrange meetings, a meeting with
:06:07. > :06:10.the defence contractor at this Dubai hotel, Liam Fox was there but
:06:10. > :06:14.there was no civil servant present much
:06:14. > :06:21.There was also a meeting with the Sri Lankan President, again Adam
:06:21. > :06:23.Werritty was there, but no civil servant. The Cabinet secretary Gus
:06:23. > :06:28.O'Donnell is conducting an investigation. Labour says that
:06:28. > :06:32.investigation must now be widened. It will not be good enough just to
:06:32. > :06:35.say he's resign and it's not going any further. It's quite
:06:35. > :06:38.embarrassing for David Cameron because some of the same
:06:38. > :06:42.individuals who funded Adam Werritty's activities are quite
:06:42. > :06:48.major donors to David Cameron's campaigns as well in the
:06:48. > :06:53.Conservative Party. But Liam Fox is not without friends in his own
:06:53. > :06:55.party. They point to his successes, recently in Britain's involvement
:06:55. > :06:59.in Libya. It was this support that was one of
:06:59. > :07:07.the factors in meaning that David Cameron did not wish to be seen to
:07:07. > :07:14.be forcing him out prematurely. Very upset for him, a man of great
:07:14. > :07:18.honour and integrity. But also very angry at the media witch-hunt that
:07:18. > :07:22.has pursued him and ultimately played a very important part in
:07:22. > :07:28.forcing him out of office. I met with Liam a few nights ago for a
:07:28. > :07:34.drink. I could see the hurt, I think, that he was feeling. He has
:07:34. > :07:39.obviously put his party and his government ahead of his own
:07:39. > :07:45.interests. We have lost an incredibly efficient, hard-working
:07:45. > :07:51.Secretary of State for Defence. David Cameron, too, paid tribute to
:07:51. > :07:55.his departing minister. I quite understood why Liam Fox has decided
:07:55. > :07:58.to resign. Obviously I'm sorry to see him go because obviously he did
:07:58. > :08:00.a good job at the Ministry of Defence, clearing up the mess left
:08:00. > :08:03.by the last government and giving good leadership to that department,
:08:03. > :08:08.particularly while we've been in action in Libya and also, of course,
:08:08. > :08:10.in Afghanistan as well. New Defence Secretary is Philip Hammond. He
:08:10. > :08:15.moves from transport. That personnel change, the Government
:08:15. > :08:18.would like to mark the end of this matter. There are, though, too many
:08:18. > :08:24.unanswered questions still hanging around about Liam Fox and his
:08:24. > :08:27.bestman for that to be the case. With me now our correspondent
:08:27. > :08:30.Richard Watson who spent the week investigating the many questions
:08:31. > :08:34.raised by the friendship of Dr Fox and Adam Werritty. Richard, you
:08:34. > :08:39.learnt some new information today, did you not? Yeah, I think the most
:08:39. > :08:43.damaging material to come out really concerns this, not for
:08:44. > :08:47.profit company funded by donors who supported Liam Fox's political
:08:47. > :08:54.ideology on the right. That seems to be the vehicle by which Adam
:08:54. > :08:59.Werritty was funding his five-star lifestyle around the world.
:08:59. > :09:02.Crucially one of these big donors came out tonight and confirmed that
:09:02. > :09:05.Liam Fox approached him, claimed he approached him after the election
:09:05. > :09:08.for funding and I think that raises some very big questions indeed. The
:09:09. > :09:15.way this story emerged today is also instructive. At 2pm I received
:09:15. > :09:20.a phone call from a source saying that Pargav's sole director had
:09:20. > :09:26.been suspended from his job with a a major hedge fund company run by a
:09:26. > :09:29.man called Michael Hindusy and he has been a big donor to the
:09:29. > :09:34.Conservative Party as well. That point the writer was on the wall,
:09:34. > :09:36.if you have a big donor to the Conservative Party pulling out the
:09:36. > :09:40.draw bridge, creating clear water between him and this story, the
:09:40. > :09:42.inevitable would follow and two hours later he resigned.
:09:42. > :09:46.uncovered some new information about what might have been going on
:09:46. > :09:50.on that trip to Sri Lanka which was after that very brutal civil war in
:09:50. > :09:53.the country? The Sri Lankan story, I think is quite Jermaine to this,
:09:53. > :09:57.central to this, what I've been told by a very well pleased source
:09:57. > :10:04.is that within the last three to four months there were serious
:10:04. > :10:07.concerns expressed by some Foreign Office officials here in London
:10:07. > :10:11.that Adam Werritty was pursuing a kind of argument that went along
:10:11. > :10:14.the following lines - now the civil war is over it's time to rebuild
:10:14. > :10:17.relationship with Sri Lanka, fair enough, but those contracts he
:10:17. > :10:20.suggested would flow would include some kind of defence-related
:10:20. > :10:24.material, highly controversial. The same source told me at that a
:10:24. > :10:26.second set of officials, this time in the Department for International
:10:27. > :10:31.Development had similar concerns recently as well. They were saying
:10:31. > :10:34.that Mr Werritty was pursuing a similar argument saying Britain
:10:34. > :10:38.should be in the business of big construction contracts to Sri Lanka
:10:38. > :10:42.and what about including defence- related contracts as a kind of
:10:42. > :10:46.added incentive to make Britain very competitive indeed. Where does
:10:47. > :10:49.it leave us? I suppose ultimately in summary it has been a week of
:10:49. > :10:52.drip, drip in evidence and allegations. It proved too much in
:10:53. > :10:55.the end but of course there could still be quite a lot to come out.
:10:55. > :10:58.We have the official inquiry next week. Thank you very much.
:10:58. > :11:01.We wanted to speak to Dr Fox tonight or any member of the
:11:01. > :11:06.Government, we were told that no- one was available. But with us now,
:11:06. > :11:09.the Conservative MP and friend of Dr Fox, Peter Bone and the Shadow
:11:09. > :11:15.Defence Secretary Jim Murphy. Mr Bone, given all that, and given
:11:15. > :11:19.that he was a daily distrabg in the past week, he had -- distraction in
:11:19. > :11:22.the past week, he had to absolutely go? I don't think so. I think it
:11:22. > :11:25.would be in the national interest for Dr Fox to remain. There were
:11:25. > :11:28.allegations and tittle-tattle but there was no suggestion he breached
:11:28. > :11:32.national security, no suggestion that there was any corruption on
:11:32. > :11:36.the part of Dr Fox. Now, he put, of course, the country first rather
:11:36. > :11:41.than his personal career and resign because, because the media was in
:11:41. > :11:44.such a frenzy. Hold on, though, the media will do what the media will
:11:44. > :11:48.do, but this was somebody who was told by Number 10 that could you
:11:48. > :11:52.hang on, of course, and wait for Gus O'Donnell's report next week.
:11:52. > :11:57.The Labour Party, I'm sure Jim Murphy will confirm it, Jim Murphy
:11:57. > :12:00.wasn't saying you could resign, he could have held on. He must have
:12:00. > :12:04.realised he did something wrong. Only the BBC could say that.
:12:04. > :12:08.said it today. Why not accept the obvious. That he resigned because
:12:08. > :12:11.he did something wrong? Absolutely not. He resigned because he did
:12:12. > :12:15.something right? Yes, he put the country first. Because of the
:12:15. > :12:20.frenzy that you and others have built up, he was distracting from
:12:20. > :12:24.the job and he decided to go. I think that was typical of Liam.
:12:25. > :12:29.Murphy, the case is closed, the man has gone, it's over. The case
:12:29. > :12:33.hasn't closed. We actually don't know why Liam resigned today. We
:12:33. > :12:37.can speculate. He put the country first. We know that's not the case.
:12:37. > :12:41.Peter has to say it and that's fine. I happen to believe that. Sorry,
:12:41. > :12:45.Peter, that's unkind for me to say you were doing your job then.
:12:45. > :12:49.Believe you to be wrong, but. I never called for his resignation. I
:12:49. > :12:53.had say. Why not? I think too often opposition politicians whether when
:12:53. > :12:56.Labour was in power and the Tories did it or when Tories are in power
:12:56. > :13:01.Labour perhaps in the past have done it, in a sense, if you throw
:13:01. > :13:04.about demands for resignations like confetti, it's devalued as a
:13:04. > :13:07.currency. I think Liam, like every politician, is entitled to a fair
:13:07. > :13:10.hearing, there was an inquiry, it should have run its course but
:13:10. > :13:14.unfortunately for Liam, as the evidence has emerged Liam has
:13:14. > :13:17.decided he can't go on. He'd become a distraction, I'm suggesting to
:13:17. > :13:21.you this is now over. What more do you want to know? Two things, Liam
:13:21. > :13:25.did break the rules, Government has rules and ministers have standards.
:13:25. > :13:28.He's paid a high price. Liam fell below his own standards and broke
:13:28. > :13:30.the Government's rules in terms of the code of conduct of the the
:13:31. > :13:36.second thing here is we need to find out whags this source of
:13:36. > :13:40.money? What is the flow of money -- what is this sorgs of money? Liam
:13:40. > :13:43.treated Adam Werritty as a good friend, Adam Werritty seemed to
:13:43. > :13:47.treat Liam Fox as some sort of franchise to make money from. We
:13:47. > :13:50.need to know as part of the inquiry, where's the money? Why has Liam
:13:50. > :13:54.decided. Let's carry out the investigation and if need be
:13:54. > :13:57.broaden the investigation further. Do you agree with that? I think we
:13:57. > :14:00.have to see what the report says. I agree with Jim that he looked
:14:00. > :14:05.embarrassed in the House of Commons earlier this week when behind him
:14:05. > :14:09.Labour backbenchers were baying for Liam Fox's blood. He's a good guy,
:14:09. > :14:13.Jim, he was reluctantly pushing the party line but you could see his
:14:13. > :14:16.heart wasn't in. What did you make of the innuendos and some would say
:14:16. > :14:22.smears this week? That's what it was all about. It was like reading
:14:22. > :14:25.a soap op radio, wasn't it. It was -- opera, wasn't it. Soap operas
:14:25. > :14:29.decide whether you get rid of a minister or not. In this case I
:14:29. > :14:33.think there is a national interest involved. I would like Jim to tell
:14:33. > :14:37.me, does he think it's in the national interest, think of our men
:14:37. > :14:39.abroad, fighting in Libya and Afghanistan, that Liam Fox has left.
:14:40. > :14:42.I've always said I would rather be discussing and debateing the
:14:42. > :14:46.Government's defence policy rather than the Government's Defence
:14:46. > :14:49.Minister. Neither Peter nor I created this crisis and neither did
:14:49. > :14:53.the BBC, Liam Fox created this crisis by having such a close
:14:53. > :14:56.professional relationship in such a murky business where it emerges
:14:56. > :14:58.this evening that Liam appears to have the solicited donations for an
:14:58. > :15:02.organisation that Mr Werritty worked for, that was then providing
:15:02. > :15:04.with advice and support. This is entirely of Liam's making, but he's
:15:04. > :15:09.done the right thing. Peter shouldn't blame the press. The res
:15:09. > :15:17.are doing their job. A narrow point, are you worried about the changing
:15:17. > :15:20.composition of the Government, that the raoeult, as it were, somewhat
:15:21. > :15:23.under represented.? Another context of this, I'm from the right of the
:15:23. > :15:26.party. I didn't think we were very well represented in the Cabinet.
:15:26. > :15:30.Now I think we're grossly underrepresented. I think what's
:15:30. > :15:34.going to happen in the next few weeks or months, the inevitable re-
:15:34. > :15:38.shuffle has to occur and the balance in the Cabinet has to to be
:15:38. > :15:41.put right. We need to have people in the Cabinet who represent the
:15:41. > :15:45.Conservative Party. We have five Liberals representing the Liberal
:15:45. > :15:49.Democrats. I think the most concerned person this evening isn't
:15:49. > :15:52.people, it will be Chris Huhne, because the inLib Dems sat their
:15:52. > :15:55.silently and defended the Defence Secretary because they knew if they
:15:55. > :15:58.took out the Defence Secretary Peter and others would respond by
:15:58. > :16:02.retaliateing against Chris Huhne. It was more like a protection
:16:02. > :16:06.racket than a Coalition Government. You said you would like a debate
:16:06. > :16:09.about the future of defence in this country. The big debate, but six
:16:09. > :16:12.defence secretaries in six years four of them Labour, one after the
:16:12. > :16:16.other, they didn't last very long. You are, it is allege by Mr Fox and
:16:16. > :16:19.others, Dr Fox and others, partly responsible for the chaos at the
:16:19. > :16:22.MoD. That's a wider debate and we can discuss that this evening if
:16:22. > :16:26.you wish. But the fact is, the Government had a defence review
:16:26. > :16:30.that Liam oversaw, that he thought was the right thing to do for the
:16:30. > :16:34.country. But I think it was a short-term measure driven by the
:16:34. > :16:40.deficit reduction plan going too deeply. We have an island nation
:16:40. > :16:43.with a -- with an aircraft-carrier that will have a holiday from
:16:43. > :16:47.aircraft. Those sorts of decisions are peculiar, I hope the new man in
:16:47. > :16:50.the job takes a fresh look at some of these decisions so they make
:16:50. > :16:53.sense. Thank you both. There are never easy times nowadays
:16:53. > :16:58.for the British military but Dr Fox's resignation comes during a
:16:58. > :17:01.war in Afghanistan, of course, conflict in Libya and a profound
:17:01. > :17:05.reorganisation as we've just been hearing and budget cuts at the MoD.
:17:05. > :17:08.The forces are still coming to taoerpls with the Strategic Defence
:17:08. > :17:12.and Security Review which Dr Fox oversaw. He fought battles against
:17:12. > :17:14.the Treasury and Downing Street on the cuts and awkwardly for the
:17:14. > :17:18.Coalition his concerns became public. In the end he had to accept
:17:18. > :17:23.sweeping job cuts in all three services, the axing of Harrier
:17:23. > :17:27.jumpjets, the Navy's flagship HMS Ark Royal and planned Nimrod spy
:17:27. > :17:30.planes. On the battlefield or above it, Libya has revealed gaps in what
:17:30. > :17:33.British forces can actually do nowadays. After ten years in
:17:33. > :17:37.Afghanistan no-one thinks that the war there is anywhere near being
:17:37. > :17:40.won, whatever that might mean. His successor, Philip Hammond, the
:17:40. > :17:43.sixth Defence Secretary in six years somehow has to maintain
:17:43. > :17:48.motheral, support troops who are risking their lives and keep going
:17:48. > :17:51.with cuts and reforms. With me is our defence editor, Mark
:17:51. > :17:55.Urban, will he be thought of, leaving what we've been talking
:17:55. > :17:59.about aside, will he be thought of as a good Defence Secretary? There
:17:59. > :18:03.are many people in Whitehall who say precisely that, he came into
:18:04. > :18:06.the MoD at an extremely difficult time, a very overspent organisation,
:18:06. > :18:11.an organisation where the political contradictions within the Labour
:18:11. > :18:14.Party about Iraq, Afghanistan, had led to such a light political touch
:18:14. > :18:17.on the tiller that it was pretty much rudderless, many people
:18:17. > :18:21.thought the service chiefs were having things far too much their
:18:21. > :18:25.own way, loading in projects into the programme you unsustainable. It
:18:26. > :18:29.needed a big character to turn it all around, to get the Strategic
:18:29. > :18:33.Defence and Security Review in, and many people feel that Liam Fox was
:18:33. > :18:36.precisely that man and that he had the force and personality to do so
:18:36. > :18:39.and therefore this is a considerable loss. We've heard
:18:39. > :18:44.Peter Bone and many of his other friends coming out today talking
:18:44. > :18:48.about him but he made some enemies, too. Precisely for those same
:18:48. > :18:52.reasons the force of character, the fact that he knew his own mind on
:18:52. > :18:57.many of these key issues. He came in there, for example, saying "we
:18:57. > :19:00.will get rid of one major combat aircraft type in the RAF", a thing
:19:00. > :19:04.that cascaded down into this decision to get rid of the Harriers
:19:04. > :19:07.eventually. He knew his mind on that issue. He did upset people. It
:19:07. > :19:11.was precisely part of his strategy to get the military back on the
:19:11. > :19:15.leash that upset many people. Then a few months ago, for example, when
:19:15. > :19:18.he announced that the powers of the service chiefs were being trimmed.
:19:18. > :19:21.He said in the House of Commons they don't need to be so involved
:19:21. > :19:24.in strategy, almost implying it was a waste of their time, they
:19:24. > :19:29.shouldn't be worried about this. One service chief described that
:19:29. > :19:32.remark to me as "disgusting". He certainly had many enemies,
:19:32. > :19:37.particularly within the senior ranks of the military. People who
:19:37. > :19:42.would not be, sorry to see him ago and, of course, the MoD is in the
:19:42. > :19:44.process of making those, some of those war fighters from Libya and
:19:44. > :19:48.Afghanistan redundant, which is also creating bitterness. Briefly,
:19:48. > :19:52.Philip Hammond takes over, widely regarded as a safe pair of hands, a
:19:52. > :19:56.safe bet. What are the biggest challenges he faces given that
:19:56. > :19:59.those difficult decisions have been taken? The key operational
:19:59. > :20:03.challenge is obviously managing the exit from Afghanistan, but the
:20:03. > :20:06.broader key challenge is the programme once again, already so
:20:06. > :20:10.soon after that defence review there are many people who say, no,
:20:10. > :20:13.the same old problems are going on, the thing is overset with too many
:20:13. > :20:17.projects, too many overspends. There will have to be further
:20:17. > :20:22.substantial cuts in the forces and Mr Hammond will need to get his
:20:22. > :20:26.head round that issue. Thank you very much. Also with us, the former
:20:26. > :20:29.head of the army Sir Mike Jackson. Leaving aside the details of what
:20:29. > :20:32.went on, when you have the head of the MoD distracted by something as
:20:32. > :20:37.he has been every day this week, how difficult is it for the
:20:37. > :20:40.organisation to know exactly where it's heading? It's obviously a
:20:40. > :20:44.distraction. The good thing perhaps is that it didn't last very long,
:20:44. > :20:49.although it may seem long. It's good that it's over? It's good that
:20:49. > :20:56.it's over. One way or the other. But we now know.
:20:56. > :21:02.But echoing what's just been said, it's a very complex canvas at the
:21:02. > :21:05.moment. We have a war still to be won in Afghanistan, albeit with an
:21:05. > :21:10.end date, we shall see. We have an operation to conclude in Libya, to
:21:10. > :21:17.say nothing of the unexpected, we can leave that. There's a very
:21:17. > :21:22.complex programme of restructuring, reforming the MoD itself, this is
:21:22. > :21:30.quite a challenge. I hope, I hope you're wrong when you say that
:21:30. > :21:33.we're still that much out of kilter as between programme and budget.
:21:33. > :21:36.Philip Hammond is a quick studyer, he spent a lot of time thinking
:21:36. > :21:40.about the Treasury matters, he went to transport and now he's at the
:21:41. > :21:44.MoD. How difficult is it for somebody, an outsider to get their
:21:44. > :21:49.head round the complexities of everything from procurement to
:21:49. > :21:56.looking after men and women's lives. I think it takes really quite a
:21:56. > :22:03.long time. There's a sense that up to a year is required before you
:22:03. > :22:07.really understand how the machine works, what motivates people. The
:22:07. > :22:13.whole acquisition process which has been the Achilles heel, if you like,
:22:13. > :22:17.of defence for so long, which, to give Dr Fox credit, he was getting
:22:17. > :22:21.a grip on, amongst other things. But we are where we are. What I
:22:21. > :22:24.think the Armed Forces look for is now continuity. They would hope the
:22:24. > :22:28.big decisions have been taken and it's now a question of making sure
:22:28. > :22:31.they get implemented. It was trgt the way you said that, that it
:22:31. > :22:37.could -- interesting that you said that, that it could take up to a
:22:37. > :22:40.year, even for a bright person to take charge of this. If we had six
:22:40. > :22:45.people in six years, that suspects no-one has quite got a grip on it
:22:46. > :22:49.for many years? I think it's a very poor reflection somehow on, I don't
:22:49. > :22:54.know, maybe the political importance given to defence. This
:22:54. > :22:58.is not a party political point because most of that churn was in
:22:58. > :23:04.the last government. That's where we have been, about one a year on
:23:04. > :23:09.average. The Armed Forces themselves could be forgiven for
:23:09. > :23:13.thinking that they don't matter that much. I'm sure that's not the
:23:13. > :23:17.case but it can give that impression, this churn. How, then,
:23:17. > :23:22.important is it for Philip Hammond not only to raise himself to the
:23:22. > :23:26.challenges we've been talking about but stays for quite sometime?
:23:26. > :23:29.Leaving personality, names apart, whoever it was, I very much hope we
:23:29. > :23:34.now have a Defence Secretary who will be in post until the next
:23:34. > :23:38.election. To give that continuity. Do you think that Liam Fox should
:23:38. > :23:44.have gone because he was a distraction? He chose to go. I
:23:44. > :23:48.don't think it's for me to comment as a retired soldier on the
:23:48. > :23:52.politics of it. I don't know what was in his mind or whatever. He's
:23:52. > :23:55.chosen to go and that's that, we are where we are. Does any of this
:23:55. > :24:01.have an impact on the soldiers on ground which is obviously your
:24:01. > :24:05.particular concern? Yes, I think to a private soldier in Afghanistan
:24:05. > :24:09.the name and the personality of the Secretary of State may just be part,
:24:09. > :24:16.just on his radar screen but I don't think it's going to be much
:24:16. > :24:20.of his thinking day. What he looks for is good direction from the top
:24:20. > :24:23.downwards and a constandcy of direction. I go back to my
:24:23. > :24:28.continuity point. Thank you very much, General Sir Mike Jackson.
:24:28. > :24:32.It's one of the cliches of politics that all political parties are
:24:32. > :24:39.coalitions but it's true that Liam Fox who once harboured ambitions to
:24:39. > :24:42.be Tory leader was once seen to be the emblematic figure of the right.
:24:42. > :24:46.Today we've been hearing the right has never been weaker in the Tory
:24:46. > :24:55.Cabinet than it is now. Shaun Ley looks back at Liam Fox's career and
:24:55. > :24:59.what he represented. Liam Fox is that increasingly rare
:24:59. > :25:04.beast at the top of the Conservative Party, no Cameron-
:25:04. > :25:07.style social liberal, he signalled that he's an unreconstructed
:25:07. > :25:11.Thatcherite by making the lady herself star-turn at his 50th
:25:11. > :25:15.birthday party. From the start of his Parliamentary career in 1992,
:25:15. > :25:18.he was prepared to defy the leadership, challenging John
:25:18. > :25:22.Major's delicate party balancing act over Europe by publicly
:25:22. > :25:27.pledging his opposition to scrapping the pound. In any cunning
:25:27. > :25:32.fight over the EU he could yet become a rallying point for
:25:32. > :25:39.hardline sceptics. The EU is locked in the past. We need an agenda for
:25:40. > :25:49.the 21st century. We need to break away from the whole outdated
:25:50. > :25:50.
:25:50. > :25:54.concept of ever closer union much He was ambitious, in opposition he
:25:54. > :25:59.flourished, his convivial style making him an ideal party chairman
:25:59. > :26:03.to rally demoralised party troops. For Liam Fox this could never be
:26:03. > :26:07.the nasty party and its past was nothing to be ashamed of. There is
:26:07. > :26:14.no such thing as government money, there is only tax-payers' money,
:26:14. > :26:18.remember that one. You cannot go on squeezing wealth
:26:18. > :26:24.creators to finance an ever hungrier government machine. David
:26:24. > :26:30.Cameron put him in charge of health, but Dr Fox enthused about an
:26:30. > :26:34.insurance-based NHS, hardly helpful to the new leader's attempts to
:26:34. > :26:37.decontaminate the Tory brand. Defence fitted his traditional Tory
:26:37. > :26:41.instincts but in taking on the military top brass he impressed
:26:41. > :26:45.Number 10 with his appetite for reform. Less welcome was an
:26:45. > :26:49.interview calling Afghanistan a broken 13th century country and
:26:49. > :26:54.leaks showing him valiantly fighting the Treasury over defence
:26:54. > :26:59.cuts. Who leaked and why was never established.
:26:59. > :27:02.Liked but never entirely trusted, a reputation Liam Fox takes with him
:27:02. > :27:05.to the backbenches, one way may yet give David Cameron cause to be
:27:05. > :27:09.nervous. Shaun Ley with that report. Joining
:27:09. > :27:12.me to discuss the Fox resignation and what means, Fraser Nelson the
:27:12. > :27:17.editor of the Spectator and Allegra Stratton, political correspondent
:27:17. > :27:20.with the Guardian. Fraser, you know Liam Fox, you've heard the various
:27:20. > :27:26.arguments put about today, do you think this was a good man hounded
:27:26. > :27:30.out by the press or do you think it was someone who made fundamental
:27:30. > :27:34.misjudgments? I think it was a good man who made fundamental
:27:34. > :27:37.misjudgments. Throughout all of this nobody is saying he was a bad
:27:37. > :27:40.Defence Secretary, politicians never resign because they did the
:27:40. > :27:44.job wrong it's always something else. I think he was right to think
:27:44. > :27:48.this couldn't go on. You just feel in your bones as a politician that
:27:48. > :27:52.this story is not going to go away. I suspect with him he probably
:27:52. > :27:55.could have hung on, David Cameron probably would have backed him but
:27:56. > :28:02.he decided that the critical mass of bad news stories was such that
:28:02. > :28:07.it was time to walk the plank. Allegra, he was pretty naive,
:28:07. > :28:11.wasn't he? Indeed, he was. Also, we've been playing this game in the
:28:11. > :28:15.office of trying to imagine that he was the relationship with Werritty
:28:15. > :28:18.if she had been a woman and would we have necessarily hung back from
:28:18. > :28:21.that and not interrogated that relationship and not said, hold on
:28:21. > :28:27.a second this is completely normal. There was naivety, he does have
:28:27. > :28:31.this kind of boyish charm, though. That is a part of his thing, that
:28:31. > :28:34.he's kinda, swbsb from his constituency earlier was talking
:28:34. > :28:37.about him having Blair-like qualities. Is that a compliment or
:28:37. > :28:41.not? From him he said it was a compliment, a kind of sparkle in
:28:41. > :28:46.his eyes? He loves Conservatives. When he was party chairman he would
:28:46. > :28:48.talk to the activists in their 50s and 60s and wee love talking to
:28:49. > :28:53.them and it was reciprocated. That's why the party liked him.
:28:53. > :28:57.They could tell that he was a Conservative to his heart. Was part
:28:57. > :29:02.of it, though, talking with Peter Bone there, there was innuendos
:29:02. > :29:06.about him and smears which nobody quite put their finger on but it
:29:06. > :29:10.contributed to the '80s fear around him? He's always had this
:29:10. > :29:15.atmosphere around him. He is age blind as a politician, friends in
:29:15. > :29:17.their 70s, and 20s, it doesn't matter to him. That's odd for a
:29:17. > :29:21.politician. The same thing about social status. Normally when a
:29:21. > :29:26.politician has a bestman it's a political appointment, somebody
:29:26. > :29:31.who's up there in stature, he doesn't care for any of that. He's
:29:31. > :29:35.saying, look here's my best mate, sure he's 16 years younger, but I
:29:35. > :29:38.don't care. Odd for a politician but normal for a person. We're not
:29:38. > :29:42.dealing with something with subjectivity within it completely
:29:42. > :29:46.what, we've had in the last 24 hours, the critical thing and why
:29:46. > :29:49.we believe Gus O'Donnell was going to be quite critical. I saw people
:29:49. > :29:53.from Downing Street on Thursday night, last night, when those first
:29:53. > :29:58.editions were dropping, The Times and frbg T in particular which were
:29:58. > :30:02.beginning to draw the link between some of this money and influence in
:30:02. > :30:05.defence contracts -- FT -- at that toeupbt, you have the the
:30:05. > :30:07.Ministerial Code of Conduct, the wrong-doing and perception of
:30:07. > :30:10.wrong-doing. It was beginning to look like you have both those
:30:10. > :30:13.things. Where does this leave the party, there are those on the right
:30:13. > :30:17.saying they're being edged out and they're much more important in the
:30:17. > :30:21.country, the Conservative Party in the country than they are in the
:30:21. > :30:24.Cabinet? Certainly the Conservative Party will see in Liam Fox an
:30:24. > :30:27.unashamed Conservative champion. But I don't think anybody can claim
:30:27. > :30:32.that David Cameron was using this to get rid of a nasty right-winger.
:30:32. > :30:35.But even so, they might say, David Davis is in the backbenches, John
:30:35. > :30:39.Redwood is in the backbenches, talented people but none inside
:30:39. > :30:45.Number 10? Yes, I have a feeling they won't. It remains to be seen
:30:45. > :30:47.but it's not as if Philip Hammond is a kind of socialist in a suit. I
:30:47. > :30:50.don't think that the political balance of the Government has
:30:50. > :30:53.changed much. Bear in mind you had a speech from the Chancellor last
:30:53. > :30:57.week at party conference where George Osborne was very clear about,
:30:57. > :30:59.for instance, environmentalism, something that the right of the
:30:59. > :31:02.party were at one stage worried that the leadership didn't reflect.
:31:02. > :31:06.Now they are reflecting. We're seeing the dynamic of the Coalition
:31:06. > :31:11.and we will see in the years to come it will increasingly, the
:31:11. > :31:15.Tories will increasingly creep right purely as a sort of kind of
:31:15. > :31:21.uncoupling at the head of the next election. Do you think then, the
:31:21. > :31:23.implication was that, you're saying, Cameron handled it well. What the
:31:24. > :31:26.about the re-shuffle, two women have been promoted with this?
:31:26. > :31:30.That's right. David Cameron is in big trouble with women right now
:31:30. > :31:35.and needs to make up and promote them. I don't think he promoted
:31:35. > :31:38.Justine Greening for tokenistic reasons, she's an incredibly sharp
:31:38. > :31:43.MP. I think the appointment of Philip Hammond in defence is
:31:43. > :31:47.interesting. He isn't a guy who wakes up in the morning and puts on
:31:47. > :31:51.Union Jack cuff links like Liam Fox did. He's a kind of Alastair
:31:51. > :31:58.Darling figure, an accountant, that's his tkhaoepber, like a human
:31:58. > :32:01.fire extinct wisher, sent there to calm this department -- demeanour.
:32:01. > :32:04.Liam Fox did the hard stuff. He took the knocks, now the plan needs
:32:04. > :32:08.to be implemented. Can I just make one observation about this re-
:32:08. > :32:12.shuffle, not about women, which is it's qaoeult a George Osborne re-
:32:12. > :32:17.shuffle, Philip Hammond was close to him. Justine, obviously, she's
:32:17. > :32:22.the fifth member in the Treasury and now she's suddenly gone up to
:32:22. > :32:27.being top of the Department for Transport, quite a meteoric rise,
:32:27. > :32:31.she's good but it's traoebgs Lib Dem quick and now PPS to Osbourne
:32:31. > :32:36.and he's somebody who has talked about Europe having to break up.
:32:36. > :32:39.There are interesting sub stories. Do either of you think the story is
:32:39. > :32:43.over? I very much doubt the Sunday papers won't have anything to say
:32:43. > :32:46.about this. There are still unanswered questions about who was
:32:46. > :32:50.funding Adam Werritty and why. I think when the report comes out on
:32:50. > :32:53.Monday, I think Liam Fox will personally be in the clear. Indeed,
:32:53. > :32:56.it's not over for Fox but it's probably over in terms of the
:32:56. > :33:00.implications at the top of government. Thank you very much.
:33:00. > :33:02.David grossman is here with a look at some of tomorrow's front pages
:33:02. > :33:05.much You won't be surprised to hear they
:33:05. > :33:11.all lead on the resignation of the Defence Secretary. The front page
:33:11. > :33:15.of the Guardian "No more denials, fox quits." Co-written by one
:33:15. > :33:17.Allegra Stratton whose sources have told her Werritty's evidence had
:33:17. > :33:22.not impressed O'Donnell and the Cabinet secretary was concluded
:33:22. > :33:28.that Fox had repeatedly broken the Ministerial Code. Rattling thrao.
:33:28. > :33:31.Secret cash trail that meant Fox had to go. This was the crucial
:33:31. > :33:34.development today, this donor saying Fox was solicting the
:33:34. > :33:41.donations for Werritty. Going on the next paper we have
:33:41. > :33:45.there, the FT "Werritty revelations claim Fox." That's those same
:33:45. > :33:51.revelations and defenceless Liam Fox in the Independent.
:33:51. > :33:57.The Times again "Hunted Fox." Final lit the Mirror, "Another fine
:33:57. > :34:00.mess." Where they link Liam Fox and Oliver Letwin with his bins.
:34:00. > :34:07.Thank you all very much. Now, that's all for Newsnight
:34:07. > :34:10.tonight. Martha is up next with the review looking ahead to next week's
:34:10. > :34:13.Man Booker Prize. Tomorrow Wales play France, the red dragon will be
:34:13. > :34:18.flying above Downing Street and as they're the last home nation in the