George Osborne moves to peg public finances to Victorian values

Chancellor will use Mansion House speech to outline new fiscal framework with aim of permanent budget surpluses and only 'exceptional' borrowing

George Osborne is to announce a return to the public finances of the Victorian age, with plans for permanent budget surpluses designed to cut the national debt and to make life uncomfortable for the Labour party.

The chancellor will use his annual Mansion House speech on Wednesday to exploit the political advantage of the Conservative victory in the general election with a "new settlement" that would allow the government to borrow only in exceptional circumstances.

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