Defence budget will be cut by eight per cent, some increase in spending, esp cyber and intelligence

Osborne will cut the defence budget by eight per cent. Job cuts will come from civilians, not soldiers, sailors and airmen on the front line, and there will be increased investment in better equipment and in cyber warfare.

The armed forces covenant will continue to be funded permanently, with Osborne finding the money from Libor fines. Intelligence forces will receive a 3.4 per cent budget increase.