The Chancellor has set out a tough new economic policy which will require future Conservative governments to run an absolute surplus during periods of growth.
Coupled with a commitment to increase infrastructure spending at least in line with GDP growth, George Osborne's policy means that there will be no let-up in public spending discipline if the Tories win the next election, even after they have achieved their target of eliminating the deficit, aides said.
British governments have run a surplus in only seven out of the past 50 years.
Video report by ITV News Political Editor Tom Bradby
– Tom Bradby, ITV News Political Editor
George Osborne's clear message today is revolutionary: a surplus in good times as an insurance against bad times.
In 25 years of covering politics, I have never heard a senior politician make an out-and-out commitment to running budget surpluses.
He is intending to fight the next election squarely on the public finances.
Osborne's keynote speech also announced:
- An ambition to impose a freeze on fuel duty until polling day in May 2015;
- Confirmation of plans to accelerate a Government-backed mortgage guarantee scheme;
- Plans to require the long-term unemployed to work for their benefits
Video report by ITV News Deputy Political Editor Chris Ship
Also on Monday a ComRes survey for the Independent suggested people believe their families would be better off under Labour but back the Conservatives to keep the economy growing.
The poll also found Labour's lead over the Tories has dropped from six points to four despite the Opposition revealing manifesto pledges at its party conference in Brighton.