Philip Hammond: Armed Forces cannot take any more major cuts However, he cautioned that imposing anything more than small-scale efficiencies on the Ministry of Defence in the looming 2015-16 spending review would mean the military could no longer fully operate. The Defence Secretary was repeatedly pressed on the issue as he unveiled plans to speed up the withdrawal of troops based in Germany - aimed at saving £240 million a year. "We have some challenging efficiencies which we are driving through now, including in the front line commands," he said. I have never said, and I would never say, that there are not further efficiencies that we can take and we are working right now to identify where we mighty find still further efficiencies across the defence budget. But really, if we go beyond what can be delivered from efficiency, there will have to be a reassessment of the output that is delivered. He went on: "We believe that we have got an Army that is correctly sized for the military task that has been set for us in the SDSR 2010. There will be another SDSR in 2015 but the military is correctly sized across all the services for the level of strategic ambition that has been set. Challenged over whether he was fighting the Chancellor over the spending review, he told reporters: "You phrase your question, as the media always do for understandable reasons, in terms of conflict, trying to make this feel like a conflict," he said. The reality is that I worked very closely with George Osborne for many years in the shadow Treasury team. I understand exactly the challenges that he's facing, that we collectively as a Government are facing and dealing with. "It's about us working together to resolve the best way of delivering the further fiscal consolidation that we need across Government in a way that reflects the priorities of the Government," he added - saying he was having "plenty of dialogue" with Mr Osborne. But he has a problem: he has to deliver a further fiscal consolidation and I 100 per cent recognise that imperative and we have got to work together to do it in the most effective way. In the case of the MoD, in a way that is least damaging to military capability. The head of the Army, General Sir Peter Wall, was also asked whether he was planning for possible further troop reductions. He said: "We have a contingency plan to get it down to 82,000. That has been challenging but we are going to get there and at that point we will be able to draw an affordability line which caters for our people, for our equipment, for our training activity.