As Pete says, Liam Fox’s piece this morning calling for more supply-side reform is broadly helpful to the Chancellor and has been
written with his approval. Strikingly, the former defence secretary — who still has a constituency on the right of the party — goes out of his way to back one of the most contentious
Osborne decisions, increasing the British contribution to the IMF.
But there is one line in the article that carries with it not the air of helpful advice but menace: ‘It must be understood that further reductions in budgets for security, leaving overseas
aid untouched, would be met with fury by most Conservatives.’ This is going to be one of the big battle lines for the next spending review, what happens to the defence budget? Fox is making
it clear that he doesn’t think spending on it can — or should — go any lower. But a Treasury looking for savings will always cast covetous glances at the forces and their big