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Gordon Brown will announce today a £3 billion spending rise for the Armed Forces and hundreds of millions extra for policing as ministers pledge to protect the front line in the fight against terrorism and crime.
After weeks of warnings of military cutbacks, Geoff Hoon, the Defence Secretary, will emerge with a better deal than expected from today's three-year spending review.
He secures a real-terms budget increase of 1.2 per cent, slightly better than the settlement two years ago which was the best for the Forces for more then 20 years. David Blunkett, the Home Secretary, will also be portrayed as a "winner" from the deal.
In spite of these increases, the Chancellor told his fellow ministers at a special Cabinet meeting at No 10 this morning that his spending review would have a "ruthless focus" on keeping a tight grip on public finances.
After the Cabinet meeting, the Prime Minister's official spokesman said: "The Chancellor told Cabinet this morning that his spending review statement to Parliament would make clear the Government's ruthless focus on priorities, with no relaxation of fiscal discipline."
But Mr Brown is determined to show that although he is introducing the tightest spending round of the Labour years he will not allow the nation's defences to be harmed.
The Ministry of Defence's "bureaucratic army", the 93,500 non-military staff who make up nearly a fifth of the Civil Service, is to be reduced by some 10 per cent, or at least 10,000, as Mr Brown reveals details of his plans to cut the Civil Service by 80,000 staff and relocate 20,000 others to the regions.
Theresa May, the Shadow Secretary of State for the Family, today cast doubt on Mr Brown's ability to deliver his pledges to cut jobs across the Civil Service.
She told the BBC Radio 4 Today programme: "Two years ago, Gordon Brown announced that he was going to cut 18,000 jobs in the Department of Work and Pensions. Two years later, has he cut 18,000? No, he has actually increased the number of staff by 3,500.
"So yet again we see from this Government in the area of efficiency savings, they talk the talk, but frankly they don't deliver."
Mr Hoon's settlement will be one of the surprises from today's allocation of the Government's £490 billion annual spending cake.
It may ease the task of the MoD as it completes its own review of the balance of spending between the three Services. Mr Hoon is expected to announce the details on July 21.
Mr Brown, in what seems certain to be an overtly political statement, will challenge the Conservatives to show how they could match Labour spending in such a key area.
Mr Blunkett has secured a spending increase higher than the 2.5 per cent average for the whole spending round. As disclosed last week, the budget for national security, including the counter-terrorism fight and spending on the security and intelligence services, will rise by 25 per cent, several hundreds of million pounds.
Mr Brown will also publish today the review by Sir Peter Gershon aimed at achieving efficiency savings across Whitehall.
He announced 40,000 Civil Service job cuts in his March Budget, from the merger of the Inland Revenue and Customs and Excise and from slimming down the Department for Work and Pensions. Today he will say where the rest are to be found.
Ms May looked to draw a clear distinction between Labour's plans and the Tory spending proposals: "We have been talking about cutting waste and we believe government should be run more efficiently, but there is a big difference between the way the Government and the Chancellor are approaching this and the way we are looking at it.
"He seems to be trying just to grab headlines in terms of the numbers of staff he can cut. We are taking a rather more fundamental look at it and saying what we need to do is slim down this fat and bloated Government.
"We need to ensure that government is doing less, that it is not managing so much from Whitehall and it's not interfering so much in people's lives."
But Ed Balls, Mr Brown's former chief economic adviser, defended his former boss on Today: "I think people will be surprised by the scale of the shift in resources from bureaucracy to the front line which Gordon Brown will announce this afternoon.
"He will be able to show that the old Tory myth - that we can't at the same time run a stable, strong economy and also invest in public services, that investment in public services will always lead us to recession - is proved wrong.
"We are running a stable economy, unemployment is low, inflation is low, interest rates are low, and at the same time we are engaged in the longest, most ambitious sustained increase in public investment that we have seen since the Second World War."
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