Tories: Save hard to exit recession

In a speech to the Birmingham Chamber of Commerce, he will say that the country must accept that what he describes as the "money for nothing" society had to come to an end.

Mr Osborne will present his hard-hitting comments as an example of the Conservatives' readiness to "tell it like it is".

At a time of public fury with the actions of the banks, he will even risk courting some of that anger himself by suggesting that what was happening in the banks was simply a reflection of the "worst excesses" of society as a whole.

However, the Conservatives clearly believe that the public are ready to confront some "uncomfortable" home truths, and Mr Osborne will argue that it is only by making an "honest assessment" of the country's problems that they can be resolved.

In particular, he will make clear that all the blame for the current problems cannot be laid at the door of the banks and that people need to take responsibility for their own actions.

"Our banking system is not separate from our economy, it is a reflection of it. Our banks hold a mirror up to the worst excesses of our society," he will say. "And the unsustainable debts in our banks are a reflection of unsustainable debts in our households, our companies and our Government."

He will say that Britain needs to change from an "economy built on debt" to one that is powered by savings and real returns on effort.

"It means telling people that they can't rely on massive increases in house prices to fund their retirement, and that they will have to save for a deposit to buy their own home," he will say. "It means pointing out that increasing profits through ever higher debts is not a sustainable way to build a business.

"The 'money for nothing' society has to end. The age of irresponsibility is over."