The Defence Secretary has refused to dispel rumours that the Chancellor is planning to freeze public sector pay, including salaries of the Armed Forces.
Ben Wallace told the Defence Select Committee on Tuesday that while they await further details, at the moment he supports the Chancellor’s position.
Chancellor Rishi Sunak is set to deliver his plan for public spending on Wednesday.
The Armed Forces, along with other key workers, have been on the frontline of the coronavirus pandemic, but while the Government maintains the work of personnel has been invaluable, Mr Wallace did not dismiss rumours their salaries are about to be frozen.
SNP defence spokesperson Martin Docherty-Hughes MP asked Mr Wallace: "The Committee is also very much interested in how we reward members of the Armed Forces, not just reward the Armed Forces for their response to COVID-19, but also help around recruitment, and I’m wondering if you would agree that that means that members of the Armed Forces need an above-inflation pay rise."
Mr Wallace said: "I know, having been through the negotiation process, how very tight we are on the public sector deficit place we’re in, I mean, the amount of money we have spent. Last week, when we announced £16.5bn more for our Armed Forces."
"I take it that’s a 'no'," Mr Docherty-Hughes replied.
After his initial response of "well no, no", Mr Wallace continued: "I’d love to reward our Armed Forces.
"We are rewarding them through this settlement with things like free wrap-around childcare... to add to their terms and conditions in giving them better support, but I also recognise that we have to balance, do our best and try and deal with this economic impact.
"At the moment, in this period, I would say that I support the position of the Chancellor."
Mr Wallace said this work demonstrates how defence underpins the fabric of society, and the expertise and resilience the Ministry of Defence has given other departments.