We have to prioritise spending on the real threats that face us in the future, not on historic threats no matter how much "nostalgia" we may have for them.
It's not nostalgia (okay, for some it is), it's also a matter of understanding that should a conventional threat loom over the horizon then you have to build up to a war footing on a pre-existing base capability. If you run the conventional forces down too far then IF a conventional threat arises it will take too long (if it's possible at all) to rebuild to face it.
Terrorism does not provide the same 'game over' threat that another mad git from the continent or beyond could provide (even OUR customs guys would spot THAT big a nuke in a backpack)...and I would have thought counter terrorism spending was likely to prove a diminishing returns scenario where beyond a certain point you advance capability at a steadily declining pace while costs balloon. Which isn't to say that we are spending up to that point currently, of course.
'Real threats that face us in the future' - if there is one salient point that history has reinforced over and over again it is that THE big threats are never what was expected or planned for.... hence the need to provide a well rounded defence, both via MI5 and conventional forces. When the budget cannot support what we need then (a) Shoot anyone who has been in the last 3 or 4 cabinets - it's their fault, (b) Shoot the FSA for being a toothless regulator, (c) pull back across the board if necessary, but retain core competencies in all areas...because when the 'who'd have thought it' threat appears you then have at least a cadre to build on.
Given the current dire straits we should not be involved overseas full stop, we should be building a conventional defence of the UK - it is sheer stupidity to involve ourselves overseas when we cannot even protect our own coastline... if the bloody Vikings reappeared tomorrow they'd be 50 miles inland before we even realised it'd happened.
Dave