Where is the debt reduction plan?

Britain's budgetary crisis was captured by new data on tax and spending (quoted by Bloomberg):

"Last month, cash receipts of corporation tax dropped 27% from a year earlier. Value-added tax, a levy on sales, fell 23% and income tax declined 14%. Net spending on social benefits rose 8.9% after unemployment rose at the fastest pace since 1981 in the first quarter of the year."

Frightening stuff.

Against that outlook it's hard to fault Standard & Poor's big decision to downgrade Britain's debt outlook.

George Osborne, Shadow Chancellor, has just issued this reaction:

"It's now clear that Britain's economic reputation is on the line at the next general election, another reason for bringing the date forward and having that election now. For the first time since these ratings began in 1978 the outlook for British debt has been downgraded from stable to negative. And Standard & Poors have made it very clear that unless Britain has a Government with a credible plan to reduce debt then there will be a further downgrade, with all of the serious consequences for our prosperity that would entail. Labour are putting our economic stability at risk by refusing to face up to the debt crisis they have created."

It's true that Labour isn't facing up to the debt crisis but where is the Tory plan that will stop S&P and other ratings agencies downgrading Britain again?  Helen Thomas of Policy Exchange has just written a post for CentreRight and warned that "Getting the spending cut debate out into the open is now vital to maintain international confidence in the UK." With so much attention on expenses my hope is that George Osborne is using his time away from the limelight to work on a Tory plan to return Britain to budgetary health.

Tim Montgomerie