Welby gave his first public speech since being named the next archbishop of Canterbury last week, The Daily Telegraph reported. He spoke Wednesday night in Durham, where he has been bishop for a year.
"I think the church needs to be confident in declaring its faith with gentleness and respect and love and Christians need to be clear about their faith," he said.
Welby said Christians in public office should not be afraid to "do God," a spin on Alastair Campbell, spin doctor to former Prime Minister Tony Blair, who once said "we don't do God." Blair was personally devout and converted to Catholicism after he left office.
The bishop also suggested he might consider selling Lambeth Palace, the London residence of archbishops of Canterbury. The palace is a typically English stately home with an Early English chapel and extensive additions through the centuries.
"We are meant to be -- says he who is about to move into Lambeth Palace -- with the poor," Welby said.
At least one member of Parliament has suggested selling the palace and using the money to carry out the Church of England's mission. When the audience laughed at his remark, Welby said he laughed too when he heard the idea but believes it is something he must think about.
Welby, 56, has an unusual background for a high-ranking churchman. He worked in the oil industry before deciding at 37 he had been called to be an Anglican priest and had only been a bishop for a year when he was named to Canterbury.
He is scheduled to be installed in March.