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This is a full scale strategic review with an absolutely horrible spending review on its back
Defence secretary Liam Fox
Defence secretary Liam Fox has said that it would be "utterly naive" to think the military was not going to suffer cuts, as his department carries out a strategic defence and security review.
Appearing before the defence committee for the first time since his appointment, Fox said the economic problems inherited by the Coalition made it inevitable that "budgetary pressures" would impact defence spending.
He told MPs this afternoon he had not been "shocked" by the state of the MoD's finances, but had been "less than pleasantly surprised that it was just as bad as I thought it might be".
It would be "utterly naive and unrealistic to believe anything else", he added.
And he rejected the suggestion by Labour MP John Woodcock that it had been contradictory of him to call for a larger army while in opposition if he knew he would have to make budget cuts.
Fox said he had argued from opposition that the army was too small for what it was being asked to do, particularly when it was being called on to conduct operations in Afghanistan and Iraq at the same time.
"We have to match our resources and our commitments, we either have to limit what we are going to ask armed forces to do on a concurrent basis or we have to increase funding accordingly," he said.
"I think it's very clear that in the short term there is not going to be funding available. I would like things to be other than they are, but government is about what we have and what we inherited".
He added: "We might like to have inherited a rosier picture, but that’s not there".
"What has been interesting in process has been the realisation as we've gone on that this is not a spending review, this is a full scale strategic review with an absolutely horrible spending review on its back," he said.
But he told MPs that he wanted to ensure that the military was not "salami sliced" with reductions made across all programmes. He said when he entered the MoD he had been presented with "lots of little down arrows" across the board.
"We need to be investing more in some areas than we do at the present time," he said.
Turning to operations in Afghanistan committee chair James Arbuthnot said he was not interested in "driving a wedge" between Fox and David Cameron on whether there was a timetable for withdrawal from Afghanistan as it was "not in the interests of the country".
Much has been made of apparent differences between the prime minister and the defence secretary, on Afghan policy, with Fox seeming more reluctant to set a firm date for withdrawal.
Fox's appearance before the committee came as David Cameron indicated some British forces could start to be brought home as early as this year.
Cameron was speaking in the United States where he has been holding talks with President Obama. The American leader had suggested that US forces could begin to leave Afghanistan from July next year.
Asked by the BBC whether Britain may do the same he said: "Yes, we can but it should be based on the conditions on the ground. I mean, the faster we can transition districts and provinces to Afghan control, clearly the faster that some forces can be brought home. I don't want to raise expectations about that because that transition should be based on how well the security situation is progressing.
"People in Britain should understand we're not going to be there in five years' time, in 2015, with combat troops or large numbers because I think it's important to give people an end date by which we won't be continuing in that way.
Fox appeared to impress the chair of the Commons committee, with Arbuthnot commenting at the end of the session: "Dare I say it, I think you have impressed".
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