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This allegation is a serious one: that Rachel Reeves has lied to Britons, frightening them into accepting massive extra taxes which would be used for increased welfare payments. However hyperbolic, this isn't usual political sparring; this time, the stakes are more serious. A week ago, detractors aimed at Reeves alongside Keir Starmer were calling their budget "disorderly". Today, it is branded as lies, and Kemi Badenoch demanding Reeves to step down.

This grave charge demands straightforward answers, so let me provide my assessment. Did the chancellor lied? Based on current evidence, apparently not. She told no whoppers. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we should move on. The Chancellor did mislead the public regarding the factors informing her choices. Was it to channel cash towards "welfare recipients", as the Tories assert? Certainly not, as the numbers demonstrate it.

A Standing Takes Another Blow, But Facts Should Win Out

Reeves has sustained a further blow to her reputation, however, should facts still matter in politics, Badenoch ought to stand down her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, due to the leak of its internal documents will quench SW1's appetite for scandal.

But the true narrative is much more unusual compared to the headlines indicate, and stretches broader and deeper beyond the careers of Starmer and his 2024 intake. Fundamentally, herein lies a story about how much say you and I have over the running of the nation. This should concern you.

Firstly, to the Core Details

After the OBR published last Friday some of the projections it shared with Reeves as she wrote the red book, the surprise was immediate. Not merely had the OBR not acted this way before (an "rare action"), its numbers seemingly went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were improving.

Consider the government's so-called "unbreakable" rule, stating by 2030 day-to-day spending for hospitals, schools, and other services must be completely funded by taxes: in late October, the watchdog reckoned it would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to break from its usual fare. Weeks prior to the real budget, the nation was warned: taxes would rise, with the main reason cited as gloomy numbers provided by the OBR, specifically its finding suggesting the UK was less efficient, investing more but yielding less.

And lo! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds suggested recently, that is essentially what transpired at the budget, which was significant, harsh, and grim.

The Misleading Justification

The way in which Reeves deceived us concerned her alibi, because those OBR forecasts did not force her hand. She could have chosen different options; she could have given other reasons, even on budget day itself. Before the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, yet it's a lack of agency that is evident in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself as an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, only not the kind the Labour party cares to broadcast. From April 2029 British workers as well as businesses are set to be paying another £26bn a year in tax – but the majority of this will not go towards funding better hospitals, public services, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of this extra cash will in fact give Reeves a buffer for her self-imposed fiscal rules. About 25% goes on paying for the government's own U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, a mere 17% of the tax take will fund actual new spending, such as abolishing the limit on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it had long been an act of political theatre from George Osborne. This administration could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with all of Blue Pravda have been barking about the idea that Reeves fits the caricature of left-wing finance ministers, taxing strivers to spend on shirkers. Party MPs have been cheering her budget as a relief to their troubled consciences, safeguarding the most vulnerable. Both sides could be completely mistaken: Reeves's budget was largely targeted towards investment funds, hedge funds and the others in the bond markets.

Downing Street could present a compelling argument in its defence. The forecasts from the OBR were too small to feel secure, especially given that bond investors charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan that carries way more debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget allows the Bank of England to cut its key lending rate.

You can see why those wearing Labour badges might not frame it in such terms next time they visit the doorstep. According to a consultant to Downing Street says, Reeves has "weaponised" financial markets as a tool of discipline over Labour MPs and the voters. It's why Reeves can't resign, regardless of which pledges she breaks. It's the reason Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer promised recently.

Missing Political Vision and an Unfulfilled Promise

What is absent from this is the notion of strategic governance, of mobilising the Treasury and the central bank to forge a new accommodation with investors. Also absent is intuitive knowledge of voters,