05 Mar 2013 - By
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MOD issue warning over defence cuts

MOD cutsDefence Secretary Philip Hammond has warned the Treasury that the Armed Forces cannot take more large-scale spending cuts, saying that a further budget reduction would result in a loss of the UK’s defence capabilities.

Mr Hammond said: “We have some very challenging targets ahead of us to deliver the outcome of the last spending review and I’m clear that we won’t be able to deliver big further savings.

“But we need to look broadly across government at how we are going to do that, not just narrowly at a few departments.”

Mr Hammond recently suggested that welfare should bear a greater share of austerity pain over defence, amid increased uncertainty over how best to implement spending plans.

He said: “You take half a per cent out of the welfare budget, you’ve solved the problem in defence – half a per cent. There is a body of opinion within Cabinet that believes we have to look at the welfare budget again.”

However, his views have angered others in the Coalition, particularly the Liberal Democrats who have fought for the Welfare Bill. While Mr Hammond’s views have drawn battle lines between some members of the Coalition, he denied that his stance is meant as an attack on Chancellor George Orborne’s austerity plans.

He said: “The reality is that I worked very closely with George Osborne for many years in the shadow Treasury team. I understand exactly the challenges that he’s facing, that we collectively as a Government are facing and dealing with.”

Britain currently spends around £34bn a year on defence, and Mr Osborne has said that defence will not be immune from revised budget targets in the upcoming budget statement.