Liam Fox plays hardball and wins – but at what cost to him?

Liam's war will be a long one (Photo: AP)

"I don't look at this in terms of victory or defeat." So said Liam Fox today of the defence budget, all the while wearing a smile that said the complete opposite. Dr Fox believes he has indeed won a victory over the defence budget. He's right, too. For now, anyway.

Calling an eight per cent cut in spending a victory seems a bit odd, not least because it's going to mean real pain for the Armed Forces. Even though the Treasury hasn't got the 10 percent it said it wanted, the RAF and the Navy really are going to suffer; Dr Fox today confirmed the real possibility of a "capability gap" where the first new aircraft carrier enters service without any aircraft to carry.

So why do I say it's a victory? Have I swallowed the Government spin, fallen for cynical expectations management? Well, my verdict isn't based on the outcome of the process, but on the manner in which it was reached.

Some people thought the SDSR would be a Fox-killer – by overseeing horrible cuts in defence, he would destroy his appeal to the unreconstructed Tory Right. Unless, of course, he quit in protest.  Either way, he would not, the theory went, emerge as a major player in the Conservative Party. That's not how things have turned out. Dr Fox is indeed about to oversee those horrible cuts, but with two important caveats:

1) Everyone knows he how hard he fought against this. The letter leaked to The Daily Telegraph was only one piece of evidence for Dr Fox's almost fanatical defence of his budget.  By fighting tooth and nail, and in semi-public, Dr Fox has strained the bounds of collective responsibility and risked his job. But in so doing, he has told the world these cuts are being imposed on him, by Labour and the Treasury, and are not his choice; compare and contrast with those ministers who have suggested they are mustard-keen to slash their own budgets.

2) He's not alone. He's successfully tied David Cameron to the cuts. By publicly embracing the PM as "my closest ally" Dr Fox made sure Mr Cameron would share all the anger and pain arising from the defence review. Confirming that his neck is also on the line, the PM on Friday let it be known he was "intervening" against the Treasury for Dr Fox. Even if that was a theatrical move, it matters, and showed Dr Fox has won special treatment in the CSR.

In essence, Dr Fox has shown he is not one to be pushed around or dictated to. The Cameroon ultras who once dreamt of his removal from Cabinet must now realise he's not a man to be trifled with. He's a little like North Korea or Iran acquiring a nuke: all of a sudden, you have to tread more gently, because who knows: he might not be bluffing…

Still, this enhanced image as a high-stakes hard man has a price. Dr Fox was never the most popular member of the Cabinet among his Tory colleagues – the Cameroons view him with suspicion, and a fair few others privately find his ideological zeal and personal intensity a bit much to take. The way Dr Fox has fought for his budget has struck several other ministers as distinctly uncollegiate; they deliberately eschewed the "bloody stumps" special-pleading they accuse him of. Some wonder if he really bothered to try to staunch the flow of damaging leaks from the MoD about the impact of cuts. And his relationship with George Osborne, never good, has only worsened.

Then there's the really nasty stuff: someone is behind the pretty crude smear in today's Mail on Sunday that paints Dr Fox as a boozed-up Dr Strangelove hell-bent on bombing Iran. Who? I have no idea. But someone (or several someones?) out there is not happy with Dr Fox.

So it's a Millwall FC sort of victory for Dr Fox: no one likes him, he doesn't care. For now, he's at the top of the league, with the smallest budget cut outside health and aid. But politics isn't football. Friends matter – they can make the difference between survival and the sack when trouble calls. And in any Cabinet career, trouble is inevitable. When his turn comes, he will have to fight brutally hard once again to survive; few of his colleagues will spend political capital helping him. Favours will be hard to come by. And Mr Cameron's clearly stated intention to take a personal role in defence is unlikely to fade.

So, against the odds, Dr Fox has won this battle. But it will not be his last. Liam's War will be a long one.