Since WWII it's been a process of attrition; the forces have been used in pointless exercises, like Suez, Iraq; they have simultaneously been run down and under equipped, equipped with poor expensive equipment that either has to be modernised (e.g. the SA80, Nimrod) or replaced again (the radio system that was deployed in Afghanistan). (Let's note that the SA80 lacks the punch of the 7.62 FN FAL, which could knock a hole through brick walls, and the SA80 is proving a disappointment in Afghanistan) On the face of it your suggestion appears to make sense, but sense is not often found in politicians. It certainly will not be found in the current incumbents, whose knowledge of of the classic qualifications for citizenship does not seem to include 'military service', even though Woolas was actually taught this on his course. (I know, I read the same degree.)
Don't expect too much of the Tories either, though the luxury of not being under fire does give time to work in focus groups and think tanks.
FWIW Labour is a busted flush and probably ought to be consigned to the 3rd rank/naughty step, with the Liberals moving into opposition, under the clear understanding that they can only consider PI *after* a referendum, whose design and aims have been publicly debated, clearly understood and specified. Do not forget this. PI is dangerous in almost all of its forms. I'd say all of them, but one or two examples appear to work.
Kill Labour, save defence.