How the 'Sun' portrayed the dispute between Liam Fox and George Osborne
Chancellor of the Exchequer George Osborne has emphatically rejected requests from Defence Secretary Liam Fox to provide special funding to cover the costs of replacing the Trident nuclear weapon system, according to a report from Bloomberg Businessweek.
“The Trident costs, I have made it absolutely clear, are part of the defence budget,” the Chancellor said. “All budgets have pressure. I don’t think there’s anything particularly unique about the Ministry of Defence. I have made it very clear that Trident renewal costs must be taken as part of the defence budget.”
Liam Fox recently called publicly for the Treasury to stick to a commitment made by the Labour government that the costs of renewing Trident should be ring-fenced from spending on defence equipment because he considers that the UK's nuclear weapons are of special strategic significance. The Chancellor's insistence that the costs of replacing Trident must come out of the Ministry of Defence's core budget are certain to place a major strain on other defence commitments and force Mr Fox to choose between scaling back the Trident replacement project or making deep cuts elsewhere in defence spending.
Mr Fox recently described the UK's defence equipment programme as "entirely unaffordable" and warned that the Strategic Defence and Security Review (SDSR) must shape defence forces to meet "realistic potential future threats".
Decisions on spending priorities and areas where cuts will be made are expected to be finalised by a 'star chamber' of ministers in the run-up to the Comprehensive Spending Review in autumn. If the Chancellor gets his way, and the costs for Trident's successor have to be found from the defence budget, Fox will be under intense pressure to review the scope of the successor programme, which has to date been exempted from the SDSR and for which Ministers have been unable to provide a strong justification.