He told the BBC that the government would change its debt rules to free up billions to spend on infrastructure.
The shadow chancellor, Rachel Reeves, said she would make a technical change to the way debt is measured to let it fund extra investment.
She explained: “This is being done so that we can grow our economy and bring jobs and growth to Britain.”
But the government refused to rule out any pain and said that Reeves’ first Budget next week would still mean some cuts to public services and tax rises.
The debt reduction commitment is to reduce debt as a share of the economy during this Parliament rather than over a rolling five-year period.
However, the headline debt measure is expected to unlock as much as £50bn in extra borrowing to bankroll grand construction schemes such as roads, railways, and hospitals, though all of that is not expected to be dished out on Budget day.
“We will be changing the measure of debt,” Reeves told the BBC. She said she would share that on 30 October.
She said the Treasury would “be putting in guard rails” on investment spending by having the National Audit Office and the Office for Budget Responsibility, the government’s financial watchdog, “validating the investments we’re making to ensure we deliver that value-for-money.”
Reeves added having such oversight would also “give markets confidence that there are rules around the investments we can make as a country.”
Shadow chancellor Jeremy Hunt said the “consistent advice I received from Treasury officials was that increasing borrowing meant interest rates would be higher for longer – and punish families with mortgages.”
He also added, “The markets are watching.”
However, a Labour spokesperson said it would not take any lectures from the Tories on how to run the economy, harking back to former Prime Minister Liz Truss’s mini-budget that caused market turmoil.
