Moody's downgrade will stiffen George Osborne's resolve Add to that the travails of the eurozone, itself built from an alliance of states with unsustainably high levels of spending, and the UK's path to eliminating the deficit suddenly looked a lot steeper. Mr Osborne rightly accused Labour of not fixing the roof while the sun was shining only to subsequently find that it was even harder to fix the roof when it was bucketing down with rain. As the economist Mark Littlewood pithily stated on Friday evening: "If you pretend you are reducing the deficit, but are actually on a £600bn Keynesian deficit-financed stimulus, then expect to be downgraded." Mr Osborne, of course, knows all this and far from damaging the Chancellor, oddly this downgrade is just what he needs. When the next Government minister approaches him ahead of next month's Budget with a scheme for a "little bit of help" for some policy or other, the Chancellor can wave Moody's latest opinions directly in his or her face. Unlike his shadow, Ed Balls, the Chancellor has been given a new weapon against those who think that the way to cut the deficit is to initially add to it. State spending still takes up far too great a proportion of GDP in Britain, particularly outside the economically more vibrant London and south-east of England. The tax burden on both individuals and businesses is too high and overly complicated, depressing output and entrepreneurial flair. Since the last election, this Government has introduced, or is planning to introduce, 299 separate tax rises. We are still a nation that loves to fiddle at the edges rather than take the necessary strategic steps to fundamentally reduce the size of the state. There are good reasons for hope. Mr Osborne's response to the downgrade ("Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it") was the right one. As Moody's said in its downgrade report: "The stable outlook on the UK's Aa1 sovereign rating partly reflects the strengths that underpin the Aa1 rating itself - the underlying economic strength and fiscal policy commitment, which Moody's expects will ultimately allow the UK government to reverse the debt trajectory." The ratings agency said, and you will not read this in the critics' gleeful response to the downgrade, that the "UK's creditworthiness remains extremely high." It described the UK economy as highly competitive and diversified, helped by very long maturity cycles on its debt. Not being in the eurozone is an unmitigated blessing as sterling remains under the Bank of England's control and is a global reserve currency. When France was downgraded, unlike the UK, it was maintained on negative watch, as was America. The UK is now "stable" in outlook. Even in France, with far greater economic problems, 10-year bond yields did jump temporarily, before settling back. The Chancellor has no need to panic. What Mr Osborne does need to do is make the case more strongly than ever that the deficit must be cut and, ultimately, the UK's debt mountain tackled. That is how you regain triple A ratings. In 2011, the Chancellor will possibly admit to himself now that he wavered with all the shouting around him that he "must do more" - always shorthand for higher spending. When the siren voices come next time, Mr Osborne should politely tell them where to go. Centrica's doing good All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us? You must wonder whether the famous sketch from Monty Python's Life of Brian was on Sam Laidlaw's mind when he agreed for the first time to produce a "wider economic impact" report on the value of Centrica to the UK. The report, released this weekend, reveals that Centrica, of which Mr Laidlaw is CEO, supports 174,000 jobs in the UK, generated £4.2bn in taxes and has a supply chain made up of 6,000 UK business. The report should be required reading for every politician, think tank, pressure group and anti-business campaigner polishing up their outrage meter ready for this week's announcement that Centrica, which operates British Gas, has increased profits. "Bills are going up," the critics will shout, "To line the pockets of management and shareholders. It's a disgrace. Such criticisms are wrong. Yes, profits are up (which is good for our pension funds) but that is because British Gas sold 12pc more gas in 2012 than 2011, a milder year. Margins, the amount that Centrica makes from each unit of gas, are down. As a proportion of the household bill, just 5pc is paid to Centrica in profit, a far lower figure than that paid for green levies. For the whole group, nearly all of the profit increase actually comes from smart investment decisions made in Norway and America, where acquisitions are starting to produce results. For any other business this would be seen as a matter for congratulation, not opprobrium.