Interview Blighty's top general - hotly tipped as the next head of the armed forces - has hinted strongly that the British defence industry can no longer expect to rely on sweetheart deals from the Ministry of Defence (MoD). He adds that modern warfare has now left the tank behind as surely as it has the horse.

General Sir David Richards is the current head of the British Army, and we here on the Reg defence desk were speaking to him earlier this month as part of a round table event at MoD headquarters organised by Prospect magazine.

As all the world that cares knows, the MoD is now passing through a Strategic Defence Review under the new government, in which its procurement plans (and thus in many cases the organisation of the Forces) will be brought into line with the future budget. At present, the stated equipment-buying programme is many billions more costly than the available money - and indeed it appears that that budget will now be cut substantially.

One major reason why the MoD's spending plans are so out of control - and have been since well before 9/11 - is the long-standing policy of buying kit in such a way as to place as much industrial work as possible here in Blighty, pretty well regardless of cost.

Thus it is that we find ourselves buying Nimrod MRA4 subhunters for the same price as a fleet of space shuttles, A400M transports for triple what it costs to buy much bigger C-17s, waiting years for overpriced Lynx helicopters when we could have had bigger, better, cheaper Blackhawks - sooner. And all the things we buy are still full of US or other foreign kit, so we wind up dependent on other nations for tech support anyway.

What does Richards, front runner to replace Air Chief Marshal Sir Jock Stirrup as head of the combined armed forces this year, think of this?

"I would love to see a very prosperous British defence sector but I don’t think it’s the job of the military to prop up ailing industries," he told us, before going on to liken UK defence contractors to the former nationalised coal-mining industry - famously dubbed by Mrs Thatcher a system of "outdoor relief".

"If British industry can deliver, then fine," Richards told us. "But if they’re too expensive versus the competition then I don’t think it’s our job to spend money simply to keep those industries alive.

"Ultimately, it’s why Margaret Thatcher did what she did in the 1980s. You can love her or hate her, but she transformed the British economy at a time when it was going down the tube. We’ve got to be similarly robust in our approach to the British defence sector. And I’m pretty certain that that is the view of the new ministerial team in defence.

"There may be certain things we must keep — shipyards are one example. But tanks, vehicles, these can be produced very cheaply under mass production. If you’re only producing 300 for the British army they are going to be too expensive to export to anybody else. And probably too expensive for us."

That sounds uncompromising enough, but in fact the serious British tank industry is pretty much already gone*. Meanwhile a few shipyards are still fighting hard to stay alive and keep selling things to the Royal Navy, their only possible customer given their sky-high costs. So these comments by the general aren't terribly controversial in detail.

Even so, the overall thrust of his remarks - and the suggestion that "the new ministerial team" are also against propping up subsidy-guzzling British arms firms - may send something of a chill down spines at BAE Systems.