Osborne rebukes Fox over Trident

George Osborne delivered a public reprimand yesterday to Liam Fox, the Defence Secretary, over his demands for special help in paying the £20bn bill to renew Trident. The Chancellor told his Cabinet colleague that the cost would have to be fully met from the Ministry of Defence's core budget.

In a television interview, Dr Fox warned against playing "fast and loose with the country's defences", adding that the UK's defence "capability" would be jeopardised if his department was forced to find the money for Trident. He argued that the costs should come from the Treasury because the fleet was a matter of national security.

His comments irritated Downing Street, which believes the Defence Secretary was trying to negotiate in public. However, speaking in New Delhi where he is accompanying David Cameron on his visit to India, Mr Osborne insisted: "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 part of the defence budget," he told Bloomberg news.