Osborne to bring in Budget surplus law

British Chancellor George Osborne
British Chancellor George Osborne
British Chancellor George Osborne

The chancellor George Osborne will attempt to bind future governments to maintaining a budget surplus when the economy is growing, he will announce later.

In his annual speech Mansion House speech George Osborne will outline his plan to limit governments to a balanced budget in “normal” times.

Mr Osborne first proposed the changes to fiscal policy in January reports BBC.

The announcement comes amid concerns over the national debt, which has doubled since the financial crisis.

The plan would legally prevent future governments from spending more than they receive in tax revenue when the economy is growing.

“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 say in the speech in London.

Currently, the government is committed to balancing day-to-day spending – the structural current deficit – by 2017-18.

But Mr Osborne is expected to argue that the Conservative party’s recent election victory and the country’s “comprehensive rejection of those who argued for more borrowing and more spending” means a change in approach is necessary.

“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,” he will say.