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This charge represents a grave matter: suggesting Rachel Reeves may have deceived the British public, spooking them to accept massive extra taxes which could be used for higher welfare payments. While exaggerated, this isn't usual Westminster bickering; on this occasion, the stakes are more serious. A week ago, detractors of Reeves and Keir Starmer had been labeling their budget "chaotic". Today, it's denounced as lies, with Kemi Badenoch calling for the chancellor's resignation.

Such a serious accusation requires clear responses, so let me provide my view. Has the chancellor been dishonest? Based on the available evidence, apparently not. She told no blatant falsehoods. However, despite Starmer's recent remarks, that doesn't mean there's no issue here and we should move on. Reeves did misinform the public about the factors shaping her decisions. Was this all to channel cash to "welfare recipients", as the Tories assert? Certainly not, as the figures prove it.

A Reputation Sustains A Further Blow, Yet Truth Should Prevail

Reeves has sustained another blow to her standing, however, if facts still matter in politics, Badenoch ought to stand down her lynch mob. Maybe the stepping down recently of OBR head, Richard Hughes, over the leak of its own documents will satisfy SW1's appetite for scandal.

Yet the true narrative is far stranger than the headlines indicate, extending wider and further beyond the careers of Starmer and his class of '24. Fundamentally, this is a story concerning how much say you and I get over the governance of the nation. This should should worry everyone.

First, on to the Core Details

When the OBR published recently some of the projections it shared with Reeves as she wrote the budget, the surprise was instant. Not merely has the OBR never done such a thing before (an "unusual step"), its figures apparently contradicted the chancellor's words. While rumors from Westminster were about how bleak the budget was going to be, the OBR's own forecasts were improving.

Consider the government's so-called "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and the rest would be wholly funded by taxes: at the end of October, the watchdog reckoned this would barely be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused morning television to break from its regular schedule. Several weeks prior to the real budget, the country was put on alert: taxes would rise, and the primary cause being pessimistic numbers provided by the OBR, specifically its conclusion suggesting the UK had become less productive, investing more but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is essentially what transpired at the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves deceived us concerned her alibi, because those OBR forecasts did not compel her actions. She might have chosen different options; she might have given alternative explanations, even during the statement. Prior to last year's election, Starmer pledged precisely this kind of people power. "The promise of democracy. The strength of the vote. The possibility for national renewal."

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

She certainly make a choice, just not one Labour wishes to publicize. Starting April 2029 UK workers and businesses will be paying another £26bn annually in tax – and the majority of this will not go towards spent on improved healthcare, new libraries, nor enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Rather than being spent, more than 50% of this extra cash will instead provide Reeves a buffer against her self-imposed fiscal rules. Approximately 25% goes on covering the administration's U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the tax take will fund actual new spending, for example scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, because 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 Real Target: The Bond Markets

Conservatives, Reform and all of Blue Pravda have been railing against how Reeves conforms to the caricature of left-wing finance ministers, soaking strivers to spend on shirkers. Labour backbenchers are cheering her budget as a relief to their troubled consciences, safeguarding the disadvantaged. Both sides are completely mistaken: The Chancellor's budget was primarily aimed at asset managers, speculative capital and participants within the bond markets.

Downing Street can make a strong case for itself. The margins provided by the OBR were insufficient to feel secure, particularly considering bond investors charge the UK the greatest borrowing cost of all G7 rich countries – higher than France, which lost a prime minister, higher than Japan which has far greater debt. Coupled with our policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan allows the Bank of England to cut its key lending rate.

It's understandable why those folk with red rosettes may choose not to couch it in such terms next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has effectively "utilised" financial markets to act as an instrument of control against her own party and the electorate. This is the reason the chancellor can't resign, no matter what promises she breaks. It is also the reason Labour MPs will have to fall into line and vote to take billions off social security, just as Starmer promised recently.

A Lack of Statecraft , an Unfulfilled Pledge

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