Defence budget 'balanced' - Philip Hammond

Philip Hammond has told MPs that the Ministry of Defence has balanced its budget for the first time in a decade.

The defence secretary said the £38bn deficit would be eliminated as a result of the government's savings, including redundancies and procurement changes.

He said this presented "challenges to confidence and morale" but the "black hole" in finances had to be addressed.

Mr Hammond added that forces would be well equipped, but Labour accused the government of being "reckless".

Much of the impact of the cuts announced in the 2010 Strategic Defence and Security Review is still to make itself felt.

'Chaos'

The numbers of regular service personnel will be cut by around 20% by 2020, with MoD civilian personnel falling by almost 40% in the same period.

The Army is being cut to 82,000 personnel, and reductions are being made in the Royal Navy, the RAF and the civil service.

Mr Hammond told MPs there would be "no additional reductions in head count" and that the regimental system in the Army would not be disbanded.

He said the U-turn over the carrier jets - reverting to the planes originally chosen by Labour but then dropped by the coalition - announced last week was the "final piece of the jigsaw".

Mr Hammond added: "The best way I can support our armed forces... is to give them the assurance of stable and well-balanced budget and that the equipment programme is managed and affordable."

He criticised the previous Labour government for "shirking" its responsibilities and presiding over "chaos that left a yawning black hole under our armed forces".

Mr Hammond promised to keep in place a financial "reserve built in as a prudent measure to make sure we are not blown off-course by unforeseen events".

The role of the Territorial Army would be transformed to make it an "integral part" of the plans for the military by the year 2020.

He said: "These have not been easy decisions, but they have been the right ones."

For Labour, shadow defence secretary Jim Murphy said: "Let us not forget he has announced cuts way up until 2020 with thousands of service personnel and civil servants yet to be sacked, a total of £900m of allowances still to be lost and veterans' and war widows' pensions being frozen year-on-year.

"Short-term control of defence costs in order to support careful deficit reduction needs to be coupled with long-term reform.

"But the government has been reckless where care was essential and timid when boldness has been required."