Osborne pledges hundreds of millions more for cyber

Chancellor George Osborne set out a series of cuts for a further £11.5 billion in savings in the spending review which will be put into effect just weeks before the next general election.

He said: "The recovery has to be sustained and if we abandon our deficit plan, Britain would be back in intensive care.

"This Government has taken unprecedented steps to achieve this expenditure control, but now we need to find £11.5 billion of further savings.

"Finding savings on this scale has not been easy. These are difficult decisions that will affect people in our country."

The military budget has been maintained in cash terms at £24 billion. Mr Osborne insisted the Government had to "make a major commitment to invest in cyber" which he called "the new frontier of defence".

The 3.4 per cent increase highlights the Government's concern at the increasing terrorism threat.

He added: "The intelligence services are on the frontline too. Silently, and often heroically, these fellow citizens protect us and our way of life.

"And so we will protect them in return – with a 3.4 per cent increase in their combined resource budget."

That could mean at least £1.9billion added on.To further protect the country against the terror threat, Mr Osborne revealed the police counter terrorism budget would not be cut.

Cheltenham-based GCHQ's activities have come under scrutiny following accusations it might be acting unlawfully in receiving information from the United States about personal communications.

The intelligence unit has refuted the claims, insisting it has worked "completely within the law, completely within policy and completely within the spirit of the law".

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