The Chancellor has today announced £400m for the Treasury's Special Reserve in 2007-08 as an allowance against continuing international commitments in Iraq, Afghanistan and elsewhere.
The Budget further allocates £200m from the Reserve in 2007-08 to support ongoing peacekeeping activity across the world.
Chancellor Gordon Brown said in his budget statement:
"We owe a huge debt of gratitude to our armed forces. And to support those who serve us with courage and distinction in Afghanistan, Iraq and in other demanding international commitments, I am allocating the Secretary for Defence an additional £400 million."
Treasury Reserves provide for the Net Additional Cost of Military Operations over and above those provided as part of the core Defence Budget, for example additional, fuel, allowances and stocks. The costs that the MOD would have incurred had the operation not been undertaken – for example expenditure on salaries – are deducted from the total costs.