Commons backs Budget surplus that Chancellor is warned will hit infrastructure

Osborne: preparing for "rainy days"

Osborne: preparing for "rainy days"

The Commons tonight backed the Chancellor's vow to deliver a budget surplus that opposition parties warned will hit capital investment in transport and other infrastructure.

The Chancellor George Osborne told MPs that the U.K should, "in normal times, raise more than we spend and set aside money for when the rainy days come" and set himself against the Labour party's monetary financing or 'People's quantitative easing' for additional capital investment. "It's an old idea that leads to soaring inflation, stability destroyed, lost jobs," he argued.

John McDonnell, the shadow Chancellor, claimed that the Chancellor was backing "false economies," with "the most serious being the failure to invest". He argued: "This [charter] limits all borrowing. Economists have said we need to invest. Our investment as a share of GDP is lowest in the G7 countries and business is calling for investment in infrastructure. For him to constrain himself no matter what the business case is for a project makes no economic sense."

Labour called for a national investment bank whilst Stewart Hosie, for the SNP, attacked an "unnecessary" £40bn surplus paid for in part by a £5bn cut in capital investment, whilst Tom Brake, for the Lib Dems, said: "We remain committed to eliminating the structural deficit by 2017/18 but will not abandon the need for investment in infrastructure."