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The charge represents a grave matter: that Rachel Reeves may have misled UK citizens, frightening them to accept massive extra taxes that could be spent on increased welfare payments. However exaggerated, this is not usual Westminster sparring; on this occasion, the consequences are higher. Just last week, critics of Reeves and Keir Starmer had been labeling their budget "disorderly". Today, it is denounced as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

Such a grave charge demands clear responses, so let me provide my view. Has the chancellor tell lies? Based on current evidence, apparently not. She told no blatant falsehoods. But, despite Starmer's recent comments, it doesn't follow that there is nothing to see and we can all move along. Reeves did misinform the public regarding the factors informing her choices. Was this all to channel cash towards "benefits street", like the Tories assert? No, as the figures prove this.

A Standing Takes A Further Hit, Yet Truth Should Prevail

The Chancellor has sustained another hit to her standing, however, if facts still have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the stepping down recently of OBR head, Richard Hughes, due to the leak of its internal documents will quench Westminster's thirst for blood.

But the true narrative is far stranger than the headlines indicate, extending wider and further than the political futures of Starmer and his 2024 intake. At its heart, this is an account concerning what degree of influence the public get in the running of our own country. This should should worry you.

Firstly, on to the Core Details

After the OBR released recently some of the projections it shared with Reeves while she prepared the budget, the shock was instant. Not merely had the OBR not acted this way before (described as an "exceptional move"), its numbers apparently contradicted the chancellor's words. Even as leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were getting better.

Take the government's most "iron-clad" rule, that by 2030 daily spending on hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the watchdog reckoned this would barely be met, albeit only by a tiny margin.

Several days later, Reeves gave a press conference so extraordinary it forced breakfast TV to break from its usual fare. Several weeks before the real budget, the country was put on alert: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, in particular its conclusion that the UK had become less productive, putting more in but yielding less.

And so! It happened. Despite the implications from Telegraph editorials and Tory media appearances implied over the weekend, this is basically what transpired at the budget, which was big and painful and bleak.

The Deceptive Justification

The way in which Reeves misled us was her alibi, since those OBR forecasts did not force her hand. She could have made other choices; she could have given other reasons, even on budget day itself. Prior to last year's election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, yet it is a lack of agency that jumps out in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces beyond her control: "In the context of the long-term challenges with our productivity … any finance minister of any political stripe would be standing here today, confronting the decisions that I face."

She did make a choice, only not the kind the Labour party wishes to publicize. Starting April 2029 UK workers and businesses will be contributing an additional £26bn annually in tax – but most of that will not be funding better hospitals, new libraries, nor enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of being spent, over 50% of this additional revenue will in fact provide Reeves cushion for her self-imposed budgetary constraints. About 25% is allocated to covering 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 taxes will go on genuinely additional spending, for example abolishing the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it had long been an act of political theatre from George Osborne. A Labour government could and should abolished it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and the entire right-wing media have spent days railing against how Reeves fits the stereotype of Labour chancellors, taxing strivers to spend on the workshy. Party MPs have been applauding her budget for being balm for their social concerns, safeguarding the most vulnerable. Both sides could be 180-degrees wrong: Reeves's budget was largely targeted towards investment funds, hedge funds and the others in the financial markets.

The government can make a strong case for itself. The margins from the OBR were too small for comfort, particularly given that lenders demand from the UK the highest interest rate of all G7 developed nations – higher than France, which lost a prime minister, 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 and Reeves argue this budget enables the Bank of England to reduce its key lending rate.

You can see why those wearing red rosettes might not frame it in such terms next time they visit the doorstep. As one independent adviser for Downing Street puts it, Reeves has effectively "weaponised" the bond market to act as an instrument of control against Labour MPs and the electorate. It's why the chancellor can't resign, no matter what pledges are broken. It is also why Labour MPs must knuckle down and vote to take billions off social security, just as Starmer promised yesterday.

A Lack of Political Vision , a Broken Pledge

What's missing from this is the notion of strategic governance, of harnessing the finance ministry and the central bank to forge a new accommodation with investors. Also absent is any intuitive knowledge of voters,