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The allegation carries significant weight: suggesting Rachel Reeves has lied to UK citizens, frightening them to accept massive extra taxes which would be funneled into higher welfare payments. However hyperbolic, this isn't usual Westminster bickering; this time, the stakes are higher. A week ago, critics of Reeves and Keir Starmer had been labeling their budget "disorderly". Now, it is branded as lies, with Kemi Badenoch calling for the chancellor to quit.

This grave charge demands straightforward responses, so here is my assessment. Has the chancellor been dishonest? On the available information, no. She told no major untruths. However, despite Starmer's recent comments, it doesn't follow that there is no issue here and we can all move along. Reeves did misinform the public regarding the considerations informing her decisions. Was this all to funnel cash towards "benefits street", as the Tories assert? No, as the numbers prove it.

A Reputation Takes A Further Blow, Yet Truth Must Prevail

Reeves has sustained another blow to her standing, but, if facts still have anything to do with politics, Badenoch should call off her attack dogs. Perhaps the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's appetite for scandal.

Yet the real story is much more unusual than the headlines indicate, extending broader and deeper than the careers of Starmer and the 2024 intake. At its heart, herein lies a story concerning what degree of influence you and I have over the governance of the nation. And it concern everyone.

First, to Brass Tacks

After the OBR released last Friday some of the forecasts it shared with Reeves as she wrote the red book, the surprise was instant. Not only has the OBR never done such a thing before (an "unusual step"), its figures apparently went against Reeves's statements. While leaks from Westminster suggested how bleak the budget was going to be, the OBR's own predictions were improving.

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

Several days later, Reeves held a media briefing so unprecedented it forced morning television to break from its regular schedule. Several weeks prior to the actual budget, the country was warned: taxes would rise, and the primary cause being gloomy numbers provided by the OBR, specifically its conclusion that the UK was less efficient, putting more in but yielding less.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds suggested over the weekend, that is essentially what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Alibi

The way in which Reeves deceived us was her justification, because these OBR forecasts didn't force her hand. She could have made different options; she might have given other reasons, even on budget day itself. Prior to last year's election, Starmer promised exactly such people power. "The promise of democracy. The power of the vote. The potential for national renewal."

A year on, and it's a lack of agency that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be an apolitical figure at the mercy of factors beyond her control: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, facing the choices that I face."

She did make decisions, only not the kind the Labour party wishes to publicize. From April 2029 UK workers and businesses are set to be paying an additional £26bn a year in taxes – but most of that will not go towards spent on better hospitals, new libraries, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Money Really Goes

Rather than being spent, more than 50% of this additional revenue will instead provide Reeves cushion for her own budgetary constraints. Approximately 25% is allocated to paying for the government's own policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, a mere 17% of the tax take will go on actual new spending, such as scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. A Labour government should have abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform and the entire Blue Pravda have been railing against the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing strivers to spend on the workshy. Labour backbenchers are applauding her budget for being balm for their social concerns, protecting the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and the others in the financial markets.

The government can make a compelling argument for itself. The margins provided by the OBR were insufficient for comfort, especially given that bond investors charge the UK the greatest borrowing cost among G7 rich countries – higher than France, which lost a prime minister, higher than Japan which has far greater debt. Combined with the policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say this budget enables the central bank to cut its key lending rate.

It's understandable why those wearing red rosettes may choose not to frame it this way when they're on #Labourdoorstep. According to one independent adviser for Downing Street puts it, Reeves has "utilised" financial markets to act as a tool of discipline against Labour MPs and the voters. It's the reason Reeves can't resign, regardless of which pledges are broken. It is also the reason Labour MPs must knuckle down and support measures to take billions off social security, just as Starmer indicated recently.

Missing Statecraft and a Broken Pledge

What's missing here is the notion of statecraft, of harnessing the Treasury and the Bank to forge a fresh understanding with investors. Also absent is any innate understanding of voters,