GEORGE Osborne will tonight call for a "new settlement" in the political debate on tax and spending by proposing a permanent commitment to an overall budget surplus in Britain's public finances.

The Chancellor, delivering his annual Mansion House speech in the City of London, will point to an unsustainably high national debt - 80 per cent of Gross Domestic Product (GDP) - and continuing global economic uncertainty.

He will say, that as the UK recovers, there is now a need to fix the roof while the sun is shining.

He will say Britain should aim for a "permanent change" in its approach to fiscal responsibility, pointing to countries like Sweden and Canada, which, because of sound public finances, have not had to make large spending cuts in wake of the 2008 financial crisis.

"The result of this recent British election - and the comprehensive rejection of those who argued for more borrowing and more spending - gives our nation the chance to entrench a new settlement."

This settlement, he will propose, should be accepted across the political spectrum that:

*without sound public finances, there is no economic security for working people;

*that the people who suffer when governments run unsustainable deficits are not the richest but the poorest and

*therefore, "in normal times", governments of Left and Right should run a budget surplus to bear down on debt and prepare for an uncertain future.

Mr Osborne will tell business leaders that he will set out the details of "this strong new fiscal framework to entrench this permanent commitment to that surplus and the budget responsibility it represents" in next month's Budget.

He will also announce the fiscal framework will be voted on by MPs later this year - in a bid to tie in Labour and other parties - and it will be assessed by the Office for Budget Responsibility.

"I don't want our country to give up on the future," the Chancellor will declare. "I don't want to look on from the sidelines as other parts of the world pioneer new science, promote new business, take forward new art and say to my two young children: that used to be us; that used to be Britain."

The Chancellor will add: "It is within Britain's reach to become the most prosperous of all the world's major economies in the coming generation and for that prosperity to be shared widely across our one nation.

"Working together, achieving these new settlements for our public finances, for our financial services, and for fairness in Europe, will help us secure that bright future for us all."

Mr Osborne will also announce that next month the Committee of the Commissioners for the Reduction of the National Debt - established by William Pitt the Younger - will meet for the first time in 150 years.