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Liam Fox negotiating contract for defence budget

Defence Secretary continues procurement negotiations

03 August 2010

Defence Secretary Liam Fox has confirmed he is currently negotiating a contract for the defence budget.

Last week, chancellor George Osborne announced that the cost of renewing the Trident nuclear deterrent programme must be paid for out of the defence budget, resulting in a £20 billion shortfall for the department.

Mr Fox claimed the renewal of Trident will be more cost-effective than the alternatives, although he admits it may affect other areas.

"The crux decision is what are the risks we are willing to take for Britain's national security.

"A lot of the contracts that have been entered into will be as expensive to leave as to continue but we will want to make decisions about what is best for the defence in the long term," he said.

The chancellor confirmed in his Budget speech that all government departments would face average cuts of 25 per cent, while some could even have their budgets slashed by 40 per cent.

Mr Fox is expected to meet the national security council later this year to confirm the budget and make an announcement in the last week of October. 

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