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This allegation carries significant weight: suggesting Rachel Reeves may have lied to Britons, spooking them to accept billions in extra taxes that could be funneled into higher welfare payments. While exaggerated, this isn't usual Westminster sparring; on this occasion, the stakes could be damaging. A week ago, detractors aimed at Reeves and Keir Starmer were calling their budget "chaotic". Now, it is branded as lies, with Kemi Badenoch demanding the chancellor's resignation.

This grave accusation requires straightforward answers, therefore let me provide my assessment. Has the chancellor been dishonest? On the available information, no. There were no blatant falsehoods. But, notwithstanding Starmer's yesterday's comments, it doesn't follow that there is no issue here and we can all move along. Reeves did mislead the public regarding the factors informing her decisions. Was this all to funnel cash towards "welfare recipients", like the Tories assert? No, as the figures demonstrate it.

A Standing Sustains Another Hit, But Facts Should Prevail

Reeves has sustained another blow to her reputation, however, should facts still matter in politics, Badenoch should call off her attack dogs. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's appetite for scandal.

Yet the real story is much more unusual compared to the headlines indicate, extending wider and further than the political futures of Starmer and his 2024 intake. At its heart, this is a story about how much say you and I have over the running of the nation. This should concern everyone.

Firstly, on to the Core Details

After the OBR released recently some of the forecasts it provided to Reeves as she wrote the red book, the shock was immediate. Not only has the OBR not acted this way before (an "exceptional move"), its figures apparently went against the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget would have to be, the watchdog's predictions were improving.

Consider the Treasury's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented that it caused breakfast TV to break from its usual fare. Weeks before the actual budget, the nation was put on alert: taxes were going up, with the primary cause being gloomy numbers provided by the OBR, in particular its conclusion that the UK had become less productive, investing more but yielding less.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is essentially what transpired at the budget, that proved to be big and painful and bleak.

The Misleading Justification

Where Reeves misled us was her alibi, since those OBR forecasts did not force her hand. She might have made other choices; she could have provided other reasons, even on budget day itself. Prior to the recent election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it's powerlessness that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years casts herself as an apolitical figure at the mercy of forces beyond her control: "In the context of the long-term challenges with our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She certainly make decisions, just not one the Labour party cares to publicize. Starting April 2029 British workers and businesses are set to be contributing another £26bn a year in taxes – but most of that will not go towards spent on improved healthcare, public services, nor enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Money Really Goes

Rather than being spent, more than 50% of the additional revenue will instead provide Reeves cushion for her self-imposed budgetary constraints. Approximately 25% is allocated to paying for the government's own policy reversals. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the tax take will go on genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always a bit of political theatre by George Osborne. This administration should have abolished it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and all of Blue Pravda have spent days railing against the idea that Reeves conforms to the stereotype of left-wing finance ministers, soaking hard workers to spend on the workshy. Labour backbenchers have been cheering her budget as a relief to their social concerns, protecting the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was primarily targeted towards asset managers, speculative capital and participants within the bond markets.

The government can make a strong case for itself. The margins provided by the OBR were deemed insufficient for comfort, especially given that bond investors demand from the UK the greatest borrowing cost of all G7 developed nations – higher than France, which lost its leader, higher than Japan that carries far greater debt. Combined with the policies to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the central bank to cut interest rates.

It's understandable that those wearing red rosettes might not couch it in such terms next time they visit the doorstep. As one independent adviser for Downing Street puts it, Reeves has effectively "utilised" financial markets as an instrument of control over her own party and the electorate. It's the reason Reeves can't resign, no matter what promises she breaks. It is also the reason Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer indicated recently.

Missing Political Vision and a Broken Pledge

What is absent from this is any sense of statecraft, of mobilising the finance ministry and the central bank to forge a fresh understanding with investors. Missing too is any innate understanding of voters,