THE DEFENCE budget will be cut by two per cent in 2015, a much smaller saving than that seen in other departments, in a victory for Philip Hammond that will see no reductions to troop numbers.
The defence secretary will have to find £875m worth of savings, and his department will have a £32.6bn budget in 2015-16. George Osborne said yesterday that the savings will be found by reducing the civilian workforce, with £750m coming from renegotiating contracts, but that David Cameron had refused to sanction “a reduction in Britain’s military capabilities”.
Osborne also promised that the government would fund the military covenant – measures to ensure that soldiers are supported if wounded while on duty – indefinitely, rather than for the five years previously promised. He said that this would be paid for using money the Treasury had collected from fines related to Libor – the interbank lending rate that was found to have been rigged last summer.
Hammond will, however, have to fund a 3.4 per cent rise in the budgets of Britain’s spy agencies. The increase, an attempt to bolster counter-terrorism efforts, comes despite controversy over the intelligence methods used by GCHQ.
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