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.

Labour, still shaken by the scale of its defeat last month, will be forced to decide whether it wants to back the proposal that tax revenues should cover spending on both infrastructure and the day-to-day running of government when parliament votes on Osborne’s tougher approach to the public finances later this year.

Labour fought the election on a policy of running a surplus on day-to-day spending but with borrowing allowed to fund public investment projects. This would be ruled out under the new proposals, which are far more stringent than have been the postwar norm.

Osborne will say: “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.”

During the election, Labour struggled to cope with the accusation that it had spent and borrowed too much in the years leading up to the financial crisis. Some of the contenders to replace Ed Miliband as opposition leader have said subsequently the public finances should have been in a healthy state in the last years of a 15-year period of economic expansion lasting from 1992 to 2007.

Osborne will say that he wants “a settlement where it is 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 that therefore, 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 add: “In the budget we will bring forward this strong new fiscal framework to entrench this permanent commitment to that surplus, and the budget responsibility it represents. This fiscal framework will be voted on by the House of Commons later this year, and assessed by the Office for Budget Responsibility we created.”

Treasury figures show that in only seven of the past 50 years have governments run a budget surplus – the last of them a run of three years at the end of the 1990s and the start of the 2000s when Gordon Brown was chancellor.

Governments were expected to at least balance the books in the 19th century and in the first three decades of the 20th century, when the public finances were run on the Mr Micawber principle that income exceeding spending equalled happiness and spending exceeding income equalled misery.

Osborne will drive home his desire to bring back the days of sound finance by announcing he will convene the first meeting in more than 150 years of the committee of the commissioners for the reduction of the national debt.

Set up by William Pitt the Younger to help repair the damage to the public finances caused by the Napoleonic wars, the body last met in 1860 when William Gladstone was chancellor. Commissioners include the chancellor, the governor of the Bank of England, the speaker of the House of Commons, and the lord chief justice.

Treasury sources said the committee had a ceremonial function, but the meeting is meant to show Osborne’s determination to bring down the national debt, which has more than doubled to 80% of GDP since the economy fell into its deepest postwar recession seven years ago.

A chancellor would be allowed to override the budget surplus rule if the economy again ran into severe problems, but the details of what would constitute abnormal circumstances will not be revealed until Osborne delivers his summer budget on 8 July.

He will argue in his address to the City’s elite that the UK needs to follow the example of Canada and Sweden. Both countries, the chancellor will say, ran into difficulties in the 1990s but have had among the strongest public finances of any developed economy during the last eight years and neither has had to make large cuts to public spending following the recent crisis.

“With our national debt unsustainably high, and with the uncertainly about what the world economy will throw at us in the coming years, we must now fix the roof while the sun is shining,” Osborne will say.

“Indeed we should now aim for a permanent change in our political debate and our approach to fiscal responsibility – just as they have done in recent years in countries like Sweden and Canada.”

The theme of the chancellor’s speech will be the need for a new settlement with the EU, with the City, and in the way the public finances are managed. “Without sound public finances there can be no lasting economic security – and without economic security there can be no lasting economic prosperity.”

Speaking on the BBC’s Today programme on Wednesday, the financial secretary to the Treasury, David Gauke, defended Osborne’s announcement against the accusation that it symbolised a return to the economics of the Victorian era.

“The idea that there is a contradiction between taking a fiscally conservative approach and getting to grips with public finances and growing the economy is simply not true,” he argued. “In 2014 we were the fastest growing major economy in the western world, while pursuing measures to reduce our deficit. The two can run together.”

Gauke said the government’s new aim was to achieve an overall surplus as opposed a cyclically adjusted current budget, as was promised in the runup to the general election, but that planned cuts would stay the same. “We remain committed to finding the £30bn that we talked about during the general election campaign over 2016-17 and 2017-18,” he said. “We’re not resigning from that.”

Gauke said the Office for Budget Responsibility would play a very important role in determining what constituted “normal times”, but that the details of the plan would be set out in July’s budget.

“The point I would make to you [is that we have an economy with] a large financial services sector, which makes us much more vulnerable to banking crises,” said Gauke.

“We’re in a period of low inflation, which means our debt isn’t going to be inflated away. We have to have a government that pursues strong measures to bring our debts down.”