The chancellor stated that when the economy is in a period of “normality”, the country should be “raising more money than we spend and using that to pay down our debts”.
“And when the bad times come, the government will have to set out a clear plan to get back to health,” he added. “Fixing the roof while the sun is shining and a plan for repair when the storm hits.”
Osborne made the remarks in a lecture to the Royal Economic Society, and described his proposal as “good housekeeping for Britain – that’s the only way to keep everyone living here secure”.
His comments run counter to Labour’s policy of running deficits during boom years between 2001 and 2007. And a government running a surplus is a rare thing – the German government achieved a surplus for the first time since 1991 in the first six half of 2014.
However, Osborne told his audience: “The case for optimism is strengthening. There is no reason why Britain cannot be the richest major economy in the world.”