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Defence secretary reveals there had been a ‘complete breakdown of trust’ between the military and the rest of Whitehall The Ministry of Defence has to accept a share of the blame for the depth of cuts to the military budget that have led to thousands of redundancies, the defence secretary, Liam Fox, has said. In his first interview this year, Fox revealed that there had been a “complete breakdown of trust” between the military and the rest of Whitehall over ballooning costs, and that this had hampered his efforts to protect the defence budget. Fox told the Guardian that military chiefs working within the Ministry of Defence at the time have to take some of the blame for allowing the situation to get so out of control. “I think the MoD consistently dug a hole for itself that it eventually found that it could not climb out of,” he said. “It is irritating to hear some of those who helped create the problem criticising us when we try to bring in a solution.” The crisis reached its peak at the end of Gordon Brown’s time as prime minister, he said. “I think there had been a loss [of trust] and in the latter part of the Brown government there was an almost complete breakdown between the MoD and the Treasury and the MoD and No 10.” His combative remarks are bound to provoke a fresh row over the government’s cuts to the armed forces, though Fox made it clear the MoD had been its own worst enemy at times. Speaking as the navy was poised to tell 1,100 sailors and support staff they are being made redundant – one third will be compulsory – Fox said he wanted the armed forces to “take the pain early” so the military can balance its books and regain lost credibility. Morale within the forces had “taken a knock” but most people understood that reform “had to be done”. Fox also said he believed critics of the military campaign in Libya had been “silenced” and proved wrong. He said he hoped there would be no more job losses beyond those already announced and that the Royal Navy might need to “increase in size towards the second half of the decade”. There might yet be recruitment in other areas. Asked if would sack military or civilian commanders if costs ran out of control again, Fox said: “Yes. And I’d cancel projects that look like they are not coming to fruition.” He made it clear that he had never considered quitting, nor would he, whatever the pressures upon him. “To walk away and let something unacceptable happen isn’t very brave,” he explained. Fox said the problems at the MoD had been building for some time and that when he took over he had no confidence that the figures he was being given were accurate, which made negotiating with a sceptical Treasury very difficult. The attitude towards the MoD was “here we go again”, he said. “I was never convinced in early months that the department actually knew what the cost of things were.” He renewed his attack on Labour for letting matters spiral out of control, saying: “How anyone would allow a department of that size to operate without controls on its spending is literally beyond me.” Fox said he believed that trust was being repaired, but at a high price. The MoD has had to make sweeping cuts to personnel and equipment to come within budget, changes that have been undertaken against a backdrop of near relentless criticism from former members of the services. He admitted the decision to approve job cuts was the most painful he had had to make, but that he believed the worst was now over. “Debt is a strategic issue. Countries that cannot produce economic wellbeing cannot defend themselves properly in the long term. None of us knows what will happen in the economy in the next decade. But we are setting as good a course as possible without knowing what the weather will be. I am as confident as you can be that the big decisions have been taken.” Fox did not rule out that defence spending might rise again, above and beyond the 1% increase for equipment that was announced earlier this summer. “As the economy recovers, we will all go into the usual negotiations with the Treasury. We will all be fighting our own corner. I do think there has been a shift in Whitehall dynamic. And the MoD is held in better esteem now.” On Libya, Fox defended the cautious approach of Nato’s military campaign, and said that he believed that this may have helped to heal some of the wounds inflicted in the region by the Iraq war. “We stuck like glue to our initial belief that minimising civilian casualties would not only give us the high moral ground over Gaddafi, but that in the post-Gaddafi environment we have different values. And in many ways that was laying to rest some of the views in the Arab world that came out post-Iraq.”He described Labour’s recent proposals for reforms to defence as “a pointless exercise … a grotesquely crude instrument which suggests they have learned little from their appalling mismanagement of the MoD.” Liam Fox Defence policy Tax and spending Ministry of Defence Nick Hopkins guardian.co.uk