LIAM FOX HAS RESIGNED

By Tim Montgomerie
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4.15pm: Three quick observations:

1. Cameron has handled the saga well. One of the Prime Minister's greatest qualities is that he doesn't panic. He knows that today's newspapers are tomorrow's fish and chip wrappers. He doesn't allow himself to get too excited or too depressed by any media frenzy. He knows that there is nothing more fickle than Fleet Street. Some say that the Prime Minister has protected Dr Fox because he doesn't want to look like he treats an embattled politician of the Right any differently from an embattled Liberal Democrat. That probably has been part of Cameron's calculation but I also understand there's been real warmth from the PM to his Defence Secretary behind-the-scenes. Nobody on the Right can legitimately say that Dr Fox hasn't been treated fairly.
2. The importance of ideological balance in the Cabinet. What the Right will still expect from Cameron now is that the balance of the Cabinet is maintained. The traditional Right of the party is under-represented at the Conservative Party's top table. With Fox gone it will be a lot weaker still. The Right think Fox should be replaced by 'one of them'. One journalist told me this was ridiculous and insisted that competence should be the only criteria. While I have sympathy for that view it's also true that Cameron must nurture the coalition of opinion within his party as well as with the Liberal Democrats. Philip Hammond as one of the Cabinet's most impressive ministers will be a safe choice but the promotion of Chris Grayling or, less likely, David Davis would ensure ideological balance.
3. Fox's record and future. It's not necessarily over for Fox. His judgment has been questioned but there has been no corruption. Despite the last week's revelations he has been a very good minister. He oversaw the Libyan campaign which successfully minimised civilian casualties and during which not one member of the British miltary was killed. He fought hard to minimise the defence cuts. He brought in Bernard Gray to fix procurement and the MoD is now seen by the Treasury to be well run. That's the first time for some time. We know from a host of Labour ministers that there are second acts in politics. Liam Fox has some lessons to learn but I don't think we've heard the end of him. I certainly hope not.

FOX'S RESIGNATION LETTER TO THE PRIME MINISTER

Dear David,

As you know, I have always placed a great deal of importance on accountability and responsibility. As I said in the House of Commons on Monday, I mistakenly allowed the distinction between my personal interest and my Government activities to become blurred. The consequences of this have become clearer in recent days. I am very sorry for this.

I have also repeatedly said that the national interest must always come beforepersonal interest. I now have to hold myself to my own standard. I have therefore decided, with great sadness, to resign from my post as Secretary of State for Defence - a position which I have been immensely proud and honoured tohave held.

I am particularly proud to have overseen the long overdue reforms to the Ministry of Defence and to our Armed Forces, which will shape them to meet thechallenges of the future and keep this country safe.

I am proud also to have played a part in helping to liberate the people of Libya, and I regret that I will not see through to its conclusion Britain's rolein Afghanistan, where so much progress has been made.Above all, I am honoured and humbled to have worked with the superb men andwomen in our Armed Forces. Their bravery, dedication and professionalism are second to none.

I appreciate all the support you have given me - and will continue to support the vital work of this Government, above all in controlling the enormous budget deficit we inherited, which is a threat not just to this country's economic prosperity but also to its national security.

I look forward to continuing to represent my constituents in North Somerset.

Yours ever,

Liam

CAMERON'S LETTER TO DR LIAM FOX

Dear Liam,

Thank you for your letter.

I understand your reasons for deciding to resign as Defence Secretary, although I am very sorry to see you go.

We have worked closely for these last six years, and you have been a key member of my team throughout that time.

You have done a superb job in the 17 months since the election, and as Shadow Defence Secretary before that.

You have overseen fundamental changes in the Ministry of Defence and in our Armed Forces, which will ensure that they are fully equipped to meet the challenges of the modern era.

On Libya, you played a key role in the campaign to stop people being massacred by the Gaddafi regime and instead win their freedom.

You can be proud of the difference you have made in your time in office, and in helping our party to return to Government.

I appreciate your commitment to the work of this Government, particularly highlighting the need to tackle the deficit, and the relationship between Britain's economic strength and our national security.

You and Jesme have always been good friends, and I have truly valued your support over the years. I will continue to do so in the future.

Yours ever,

David