George Osborne is to press ahead with plans to ensure future governments do not spend more than they receive in revenue during “normal” economic times.
Under the chancellor's proposals, the Office for Budget Responsibility will be tasked with policing new rules to ensure governments run budget surpluses in future periods of economic growth.
In his annual Mansion House speech, Osborne will say: “With our national debt unsustainably high, and with the uncertainty about what the world economy will throw at us in the coming years, we must now fix the roof while the sun is shining."
He will add: "In normal times, governments of the left as well as the right should run a budget surplus to bear down on debt and prepare for an uncertain future."
Osborne will also argue that his proposals are justified given that the Conservative party’s election mandate was a “comprehensive rejection of those who argued for more borrowing and more spending".
Treasury minister David Gauke this morning confirmed that Osborne's plan did not involve any change to the government's overall spending plans, which envisage £13bn of further departmental spending cuts by 2017/19, as well as £12bn of savings from the welfare budget and £5bn raised through combating tax avoidance.
“We remain committed to the £30bn so we are not resiling from that," he told the Today programme. "This is a more ambitious target in terms of having an overall surplus."
The chancellor is also set to announce that the Committee of the Commissioners for the Reduction of the National Debt will meet again for the first time since 1860.