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Treasury and MoD battle over Trident replacement

Defence secretary Liam Fox goes public with row over who funds £20bn nuclear missile system

HMS Vengeance, a Trident missile nuclear submarine, at Faslane naval baseon the Clyde, Scotland
HMS Vengeance, a Trident missile nuclear submarine, at Faslane naval base on the Clyde, Scotland. Photograph: Murdo Macleod for the Guardian/Murdo Macleod

A cabinet dispute over the costs of a new Trident missile system erupted into the open today when the defence secretary, Liam Fox, said his department was being asked to foot the multi-billion bill for the cost of replacing Britain's nuclear deterrent.

Defence ministers have argued that the costs of a new Trident system – about £20bn over a decade – should come direct from the Treasury since it is a matter of national security.

Fox today confirmed that Treasury officials wanted costs to be borne by the Ministry of Defence. That would make it "very difficult" to maintain the MoD's other responsibilities, he said, amid fears that cuts in armed forces numbers would be made inevitable.

The annual defence budget is less than £40bn and while the chancellor, George Osborne, said in the Budget that it would be saved from the worst of the departmental cuts, the MoD is braced for reductions of 10-20%.

Some ministers fear Osborne and David Cameron are prepared to abandon Trident replacement on cost grounds, and that this latest row over funding makes that more likely, although No 10 insisted today that the deterrent would be replaced.

Fox told BBC 1's Andrew Marr Show: "There has always been an understanding that the budget for the nuclear deterrent came from outside the core defence budget. Running costs for the deterrent have always come from inside.

"That is something we are discussing in the run-up to the spending review. To take the capital cost would make it very difficult to maintain what we are currently doing in terms of capabilities."

Fox, a confirmed hawk on Trident, went on to suggest that the negotiations were questioning the feasibility of renewing the deterrent rather than being simply a question of who pays. "We really can't play fast and loose with the country's defence," he said. "We don't know what the threats will be between now and 2050 – no one could have predicted 40 years ago what the world would look like today. So we have to ensure we have the precautions to protect Britain from nuclear blackmail by any other state."

Asked if the consequences for Trident and other defence spending would be grave, he said: "I think you can leave that to me and the chancellor to have a discussion about."

A government source urged caution last night, saying the new government did "things differently" and the issue of who funds Trident will be resolved by a new "collegiate" star chamber reviewing where spending cuts should fall. Composed of Fox's colleagues, as opposed to civil servants, the defence secretary would have a chance to make his case.

Fox is not close to Cameron and Osborne and once angered the prime minister when he likened Afghanistan to "a broken 13th century country". But he has a constituency on the Tory right and, were he to resign, could cause problems for the government from the backbenches.

The two parties in the coalition have diametrically opposed policies on renewing Trident, with the Lib Dems against and the Tories in favour. The coalition agreement says Trident should be scrutinised to "ensure value for money" while the Lib Dems may "continue to make the case for alternatives".

Fox tried to stem Lib Dem dislike for Trident by expediting a "value for money" review to report before the summer. He was "pretty confident" this would identify savings.

Last week at a Chatham House event, Fox held out the prospect of fewer nuclear missiles and warheads, and even reducing the number of planned Trident submarines from four to three, but said that he had no intention of changing his decision to replace Trident.

But a minister and ally of Fox confirmed he would face a headache if he loses to the Treasury. "First there are the capital costs and then there will be overspend – projects of that size always overspend – so if they have a £17bn capital project, over 10 years, with an overspend about half that much again, absorbing its costs into the MoD budget would at least mean an annualised £1bn. That is a lot of money – I think they're looking at cuts in armed forces units – cuts in the numbers of men."

Sources suggested the latest developments made it more likely that Trident might not be renewed, saying they suspected the price tag meant Cameron and Osborne were no longer so "theologically wedded" to its replacement.

"Whereas the New Labour machine was very wedded to Trident, Cameron and Osborne appear to be more sceptical and Nick Clegg is, of course, hostile. It may be that these new leaders are more open to shelving Trident when faced with its cost," one source said.

By making Trident an MoD expenditure, the source added, the government would make funding priorities an internal debate for the military. As well as inside the Treasury, there is widespread scepticism within the MoD and army over the relevance of replacing the existing Trident ballistic missiles.


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  • KatyCat KatyCat

    18 Jul 2010, 8:49PM

    I agree with Gideon - gosh, I thought I'd never say that but, hey, if HMT will do something (anything) to make a replacement just a bit more difficult....

  • goatee2go goatee2go

    18 Jul 2010, 8:49PM

    Sounds like it should come out of the MoD's budget.. That way, a realistic assessment of Trident's real value in relation to other defence technologies is more likely to be made. In other words, is it worth several thousands of troops, x number of fighter aircraft etc?

  • jakem jakem

    18 Jul 2010, 8:52PM

    This comment has been removed by a moderator. Replies may also be deleted.
  • CiFAndrew CiFAndrew

    18 Jul 2010, 8:56PM

    Contributor Contributor

    Costa Rica scrapped its army in 1949 - and seems to have survived OK. Japan and Germany do very well with just a self-defence force. 200+ countries in the world do very well without nuclear weapons.

    Our gross spend on the military is the third highest in the world (~$69billion). We spend $20billion per year more than Germany, $50 billion per year more than Spain and nearly $60 billion more than Holland. It is utterly crazy that we continue to spend so much on maintaining a cold-war (or goodness, even a WWII) relic.

    Before we start to axe a single penny from elderly care, child social services or mental health provision let's cut military spending by 50% - and include a commitment to not renew trident. If people feel so strongly that we need these military toys then we should pay for them with increased taxes. I bet the right-wing militaristic tendency would quickly evaporate if we said, "sure, you can have your military toys as long as the top tax rate is raised to 60%."

  • TheRebelMC TheRebelMC

    18 Jul 2010, 8:59PM

    "Liam Fox said said his department was being asked to foot the multi-billion bill for the cost of replacing Britain's nuclear deterrent."

    Oh how quickly they forget

    Liam your department doesn't have any money of it''s own - you spend our money and whether it is your department's money or the Treasury's - we the people that actually do pay for it don't want it.

  • voxpip voxpip

    18 Jul 2010, 9:00PM

    Well the first thought that comes to mind is let the bankster's bonuses pay for it. But then again why should any resources go directly to the scrap metal industry when there is so much to be done elsewhere. Beautiful admission when they say that they don't know where the next threat is coming from so let's squander 20bn on a new sub... That'll come in very handy for putting the wind up the Taliban in the deep waters of the Hindu Kush.
    Oh yes where is the next threat coming from, well try one of these: the City, Wall Street and China; perhaps not necessarily in that order.

  • SandGrown SandGrown

    18 Jul 2010, 9:04PM

    I do not see who exactly we might want to destroy with a nuclear warhead, so that is one reason for getting rid of it. Also, anyone the UK wanted nuked would also be on a US hit-list; therefore we have no need for any nuclear deterrent. Scrap it.

  • Ragnor Ragnor

    18 Jul 2010, 9:06PM

    Policing this poxy world over the decades has cost the British tax payer Billions,
    its time to realise that we ain't no super power anymore and we ain't got a endless stream of sacrificial men to dress in khakee to spill their blood on foreign shores, just for the glory of some fucked up Prime Minister and we ain't got billions to waste on that weapon of doom, cos the cold war finished years ago and ain't any told that dumb twit Fox, WE ARE SKINT, ask your greedy mates in the banking world to fund the poxy bomb, then drop it on THEM....

  • RedcoatMic RedcoatMic

    18 Jul 2010, 9:10PM

    I think it's ridiculously stupid to claim we don't need deterrents, every attempt of disarmament has ended in disaster, look at the surefooted way we called for it after the First World war and look at the near Nazi victory it lead to.

    Costa Rica does fine because no one CARES about Costa Rica, the UK is still quite important in the scheme of things and having a major nation state without the proper defenses is just naive to the extreme which we could possibly end up paying for with our lives. Better to have it and not need it than not have it and need it.

    Nuclear deterrents are necessary for MAD, you know, the thing stopping World Leaders just launching a nuke to solve any dispute?

    Humanity is not done with war, we most likely will never be.

  • NottinghamFlorist NottinghamFlorist

    18 Jul 2010, 9:12PM

    If the Con-dems scrap it, they'll gain my respect. But never my support.

    I'm quite sure my respect will evaporate though after what is done to NHS and BBC and socialism and social democracy in this country is brought to its very knees.

  • rebjn rebjn

    18 Jul 2010, 9:13PM

    I'm sorry Liam Fox, but how is replacing Trident not defence spending? If "national security" doesn't come under defence, then what's the point of the MoD? Osborne better win this battle, because Trident needs to be included in the spending review and assessed fully together with everything else (and hopefully scrapped).

  • sheffield35 sheffield35

    18 Jul 2010, 9:16PM

    billy liar says he wants to know what the public think, because of the cost of trident why not spend a few bob and have a referendum and let the people decide, or maybe that is a biy too democratic for the concervative party

  • JonP JonP

    18 Jul 2010, 9:19PM

    RedcoatMic - so how come Germany, Italy, Spain etc manage without their own nuclear weapons? Costa Rica is, one might have thought, in a rather more war-torn part of the world than western Europe.

    Typical of Liam Fox - the most right wing Tories so keen to shout for savage cuts in public expenditure in principle but so uttely unwilling to accept them in practice for their own pet projects.

  • SteveFarr SteveFarr

    18 Jul 2010, 9:21PM

    I'm guessing they'll cut Trident submarines from 4 to 3 but defer the decision on a replacement by another year or wait for Labour to self-destruct over the issue.

  • tiredofwhiners tiredofwhiners

    18 Jul 2010, 9:24PM

    The Liberals are as usual, hypocrites of the first order. First they complain that the troops in the Middle East are not properly equipped as the scale of conflict and changes to the equipment the British Armed Forces possess are not suitable fo desert warfare. This of course, was unforeseen.

    Next they say that Trident is not needed. Who is to say in 30 years time, after the inevitable bout of nuclear proliferation, that the waters around the UK finds itself full of foreign submarines with nuclear capability, and no deterrent. It takes decades to build a nuclear deterrent - not the 26 weeks to buy more kit for desert warfare. In such a scenario, the politicians and their families should suffer the fate of traitors.

    Every Liberal politician that supports disarmament is betting YOUR life against their belief, knowing that if they are wrong, there is nothing that could be done, other than surrender, which is of course, the way of the bleeding heart Liberals.

  • Robbothedoc Robbothedoc

    18 Jul 2010, 9:25PM

    I don't see why the British taxpayer should fund part of the US nuclear deterrent. Surely no-one believes that this thing is 'independent' - i.e. that we could target any country we choose to without reference to anyone else. Could we target Washington, for example (not that I'm advocating that of course). If we were able to target the US or any friend of the US then quite frankly the US Administration would be guilty of criminal negligence for selling the technology to us and putting their own citizens in danger. But if we can't then quite frankly the British electorate has been conned.
    No - what this thing is about is a permanent ticket to the UN security council and to support the rather grandiose notions of global influence that our leaders of all parties seem to be subject to. The truth is though that British citizens would be not a jot safer with than without Trident or its successor. I've never heard anyone come up with a scenario in which we alone, without the US, would have to defend ourselves by threatening to use US nuclear weapons technology whilst the US itself stood back and watched as a disinterested observer. In any situation you can think of the US would either be with us and would be threatening to use their, much larger, nuclear force or they would be trying to block us from doing something that they perceived as stupid and reckless - and I strongly suspect that the technology has interlocks built into it that would allow them to do just that.
    So even if you buy the principle of nuclear deterrence, and I'm not sure I do, then this force contributes very little to it for the immense cost.

  • Kibblesworth Kibblesworth

    18 Jul 2010, 9:26PM

    I never got why we have to rely on this psychological deterrent based on the flimsy concept that a state will be so frightened of our nuclear weapons that they won't attack us. That might of worked in the Cold War, where states could be relied upon to be rational, and where non-state actors weren't so dangerous (and even then their was the risk of missiles being fired by accident etc), but nowadays most of the states which might get nuclear weapons are slightly more deranged and ideologically driven then the relatively sane USSR leadership. And some of these actors aren't even states anymore.

    Surely we could use some of this Trident money to fund research into an actual defense system? I mean why waste money on an offensive system to be used defensively? We could invest in new technology to protect us. Some kind of missile shield perhaps? Maybe giant lasers attached to the cliffs of Dover to shoot nukes out of the sky. I don't know. But an actual defense system that protected us from attack effectively. Not these silly mind games that fall down like a house of cards in 21st century warfare.

  • TedStewart TedStewart

    18 Jul 2010, 9:27PM

    So the MoD has a stark choice.

    A real, but expensive and useless weapon, to defend ourselves against an imaginary enemy.

    Or continue to fight very real enemies in Afghanistan and elsewhere with inadequate equipment and resources, thereby putting our brave servicemen and women ever increasing risk.

    So basically the defence of the Realm is totality Foxed up!

  • sheffield35 sheffield35

    18 Jul 2010, 9:27PM

    RedcoatMic i have always been under the impressiom that trident was a attack misile for the threat of russia , russia has enough on its plate trying to sort out its finance so that threat seems to have gone away, i have never been in favour of the premise that we all die togeather that results in no winners all losers

  • PlanetNat PlanetNat

    18 Jul 2010, 9:28PM

    "The greatest threat to the military is the absence of an enemy...."

    Climate change, continual resource depletion and our other 21st century threats simply cannot be solved by military investment.

    Instead we need to invest our increasingly scarce resources wisely in life-sustaining approaches, rather than life-threatening technologies and industries.

    .

  • CiFAndrew CiFAndrew

    18 Jul 2010, 9:29PM

    Contributor Contributor

    @RedCoatMic

    Nuclear deterrents are necessary for MAD, you know, the thing stopping World Leaders just launching a nuke to solve any dispute?

    Yes, but do we need nukes? In what possible scenario in the next 50 years is Britain going to launch a unilateral nuclear strike against another country without the express support of the really big nuclear powers? There simply isn't any scenario because it's completely and utterly inconceivable. And yes there'll always be someone making the Runsfieldian "unknown unknowns" better safe than sorry - but that's just lazy defence of the status quo. If we didn't have nuclear weapons there would be no reason for us to get them - none. Remember, over 200 countries don't have nuclear weapons - British exceptionalism died sometime around the end of empire - it's pathetic how the Raj mentality remains amongst some of the military right wing.

    Whether Britain has a couple of dozen floating around the Atlantic makes precisely zero difference to our own national defence and makes no impact relative to the thousands and thousands of nukes held by America and Russia.

    In any case the whole canard about having an independent nuclear weapons system is nonsense. We are completely beholden politically, militarily and technologically to America in terms of our current nuclear system.

    So to conclude, there is no justification for an independent nuclear deterrent, and in any case our nuclear deterrent wouldn't be independent. It is staggering that anyone wants to make the case for wasting tens of billions on this white elephant.

  • Saxmansam Saxmansam

    18 Jul 2010, 9:29PM

    @tiredofwhiners

    How precisely is objection to Trident and support of additional funding and equipment for front line troops hypocritical? The LibDem line was not to abandon a nuclear deterrent but not to seek like for like replacement anyway, making your later point somewhat redundant....

    Frankly cut it, we don't need a like for like replacement, and can ill afford it.

  • whimsicaleye whimsicaleye

    18 Jul 2010, 9:33PM

    SCRAP IT!!! No place for nuclear weapons in a modern forward thinking society. Lets make a statement to world of our intent to form a progressive future and rid ourselves of the 'world power' complex once and for all!

    Plus, being the USA's poodle as we are, we would only be able to use the weapon with the USA's say so. The USA holds the keys so let them maintain a nuclear deterrent if they feel it necessary.

  • Fyregecko Fyregecko

    18 Jul 2010, 9:34PM

    How precisely is objection to Trident and support of additional funding and equipment for front line troops hypocritical?

    The latter would be a damn sight more useful. For right or wrong, the British Army has been largely involved (in Afghanistan and, previously, Iraq) in close-range warfare against an unconventional enemy. Surely better equipment, tougher vehicles, more helicopters to avoid roadside bombs that have killed many British soldiers would be of far more use than a weapons system that will either never be used (making it a waste of money) or be used in retaliation for massive loss of life (making it a failure).

  • RonnieS RonnieS

    18 Jul 2010, 9:38PM

    The military could sell an independent nuclear deterrent to the public post war, but how come they can do it now?

    Maybe if we can ditch Trident we can ditch more of the lunatic British military establishment that has cost us so much over the past half century, (whilst the Germans have been laughing up their sleeves.)

  • sheffield35 sheffield35

    18 Jul 2010, 9:38PM

    in no way do i support the taliban but put yourselves in their place now all these senior politicians have said when we are going to pull our troops out ,if i were a taliban why should they confront our troops, we all know that they will lose,so why not send the majority of their troops back to pakistan lay low two years while the the troops pull out then back to normal all our brave troops will have then died in vain, cameron and liam fox have made a grave error

  • SackTheJuggler SackTheJuggler

    18 Jul 2010, 9:40PM

    I see the unilateralist toerags are attempting to crawl back into the fold by trying to blur the difference between not replacing Trident and scrapping it. Do you think they mean well? Bollocks. CND want Iran to have nukes but not us. Scum in the 80s, scum today.

  • kunjani kunjani

    18 Jul 2010, 9:42PM

    The British independent nuclear deterrent is neither independent nor British. The weapon is American, and it's guidance system is controlled by American satellites and so its of no use unless they agree to our use of it. In the end (and it would be) THEY control it, therefore it is not a British strategic system, but a tactical American one which we pay for. How many times do we have to have this argument? It's called the 'special relationship'. The US still supports the idea of 'pre-emptive self defence', an oxymoron if ever there was one, and we concur,. Further, both countries since the Bush /Blair conspiracy apparently believe in 'first use'ie, threatening other countries with annihilation unless they do what 'we' tell them. Dosn't it make you proud?

  • joshthedog joshthedog

    18 Jul 2010, 9:42PM

    So, the Tories told us in the election campaign that Trident was affordable and budgeted for despite tough times and spending cuts.

    Now Dr Fox is having a spinny-fit because he can't afford Trident because of, er, departmental spending cuts.

    It fills one with confidence that this coalition knows what its talking about when it comes to adding-up, taking-away and the slightly more tricky subject of percentages.

  • NicholasB NicholasB

    18 Jul 2010, 9:44PM

    This is ridiculous. Trident is for defense and operated by the Royal Navy. Of course it should be paid for by the MOD.

    We need as a nation to consider what we need and can afford in terms of defense, and then how we can pay for it. Moving 95% of the 29,000 people in MoD Procurement into productive work (like teaching SMT) and having 20% of the army in theatre (buit properly equipped and paid) rather than 10% would be a great start.

  • theonionmurders theonionmurders

    18 Jul 2010, 9:44PM

    I'll expect posters to argue that pensioning off Trident will leave the UK defenceless without any nuclear capability.

    What is often left out of the debate is that the UK has six existing Trafalgar Class nuclear attack submarines in operational service while these will also eventually be either replaced by the new state of the art Astute class of hunter-killer SSN's now being built at Barrow at a cost of one billion pounds each.

    Each of these platforms already carry Tomahawk surface to surface 'Cruise' missiles - indeed the Trafalgar class has been equipped with these missiles in there conventional 'battlefield' versions since the mid 1980s.

    Why is this relevant? Because the Tomahawk system used by British SSN's has intercontinental capabilities including a range of 1350 nautical miles and can be easily converted to accomodating a nuclear warhead instead of the conventional system currently used by the Royal Navy.

    As usual the debate centres around the supposed need to have a Trident replacement, rather than recognise that what the RN already have is more than adequate for the future. Don't expect the government to recognise this 'good sense' with lucrative (and massively costly) defence contracts and juicy private procurements for the UK military industrial complex at stake.

  • Robbothedoc Robbothedoc

    18 Jul 2010, 9:45PM

    Germany, Japan, Italy and Spain amongst many other countries neither have an independant nuclear deterrent nor do you hear them campaigning to be allowed to develop one. Does anyone seriously think that the citizens of these countries are at a higher risk of - well, what exactly? Has anyone ever moved from one of these countries to Britain so that they could shelter under our 'nuclear umbrella'. If it was worth the squillions spent on it you'd think people would be queueing up at the British Consulates world wide so that they could come and be safer here.
    Or the other alternative - perhaps a little more plausible - is that British foreign policy puts us at greater risk than countries like the ones mentioned above and we need this thing to even up the risk a bit. The solution there might be to have a slightly less macho foreign policy, because we'd be rather like the drug baron who needs heavy protection because he's at higher risk than your ordinary citizen by virtue of his behaviour.

  • Saxmansam Saxmansam

    18 Jul 2010, 9:45PM

    @Fyregecko

    I completely agree- I was commenting in relation to a previous poster who remarked the 'Liberals' were hypocritical for complaining about lack of support for troops in Afghanistan and Iraq and then wishing to abandon Trident.

    Trident, is a gigantic amount of money to spend on a system we couldn't use if we wished to designed for state to state warfare of Cold War times. Arguing for complete disarmament or a scaling back of this system is debatable, but the notion of continuing to pour money into an antiquated system is ludicrous.

  • Dravazed Dravazed

    18 Jul 2010, 9:47PM

    Is there any sane and sober person in the UK who thinks that if you do not have a nuclear-missile submarine system--or indeed, any nuclear weapons at all--that you will become the vulnerable and active target of other nations?

    Think of what could be done with the amount of money being squandered on this, especially in the difficult times facing the UK. Madness!

  • Decimal Decimal

    18 Jul 2010, 9:48PM

    New schools = "waste"

    £97bn redundant missile system to make us look good in the G10 = essential

    "I doubt that Iran's policymakers or analysts place any weight at all on Britain's independent nuclear deterrent," says Fitzpatrick. "It's such a small force in comparison with the US and Israeli forces that I don't think it's a factor in Iran's decision-making."

    http://www.guardian.co.uk/uk/2010/may/20/trident-submarine-coalition-government-scrap

  • Adamastor Adamastor

    18 Jul 2010, 9:49PM

    Trident- and any replacement- will be entirely dependent on US satellites to aim and fire the missiles to their...destination, shall we say?
    Can anyone think of any circumstance in which the UK would use strategic nuclear weapons but the USA would not? Does anyone suppose the USA would allow the UK to use Trident or its successor in such circumstances?

  • theonionmurders theonionmurders

    18 Jul 2010, 9:49PM

    Why would China or Russia ever want to launce an attack on the UK or USA anyway?

    Surely all they would have to do to render us useless and militarily ineffective is to stop buying British bonds or refinancing British debt.

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