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The allegation is a serious one: that Rachel Reeves has lied to the British public, frightening them into accepting massive extra taxes that could be spent on higher welfare payments. While exaggerated, this is not typical Westminster sparring; this time, the consequences are more serious. Just last week, detractors of Reeves and Keir Starmer had been labeling their budget "uncoordinated". Now, it's denounced as lies, and Kemi Badenoch calling for Reeves to step down.

This serious charge demands clear responses, so let me provide my assessment. Has the chancellor lied? On the available information, apparently not. There were no blatant falsehoods. But, despite Starmer's recent comments, it doesn't follow that there is no issue here and we can all move along. The Chancellor did misinform the public about the factors shaping her decisions. Was this all to channel cash towards "welfare recipients", as the Tories claim? No, as the numbers prove it.

A Reputation Takes A Further Blow, But Facts Must Win Out

The Chancellor has taken another blow to her standing, but, if facts continue to matter in politics, Badenoch should call off her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's thirst for blood.

Yet the real story is much more unusual compared to the headlines indicate, and stretches wider and further than the careers of Starmer and the 2024 intake. At its heart, herein lies a story concerning how much say the public get in the governance of the nation. And it should worry you.

Firstly, to the Core Details

When the OBR published last Friday a portion of the forecasts it provided to Reeves while she prepared the budget, the shock was immediate. Not merely had the OBR never done such a thing before (an "exceptional move"), its figures seemingly contradicted the chancellor's words. While leaks from Westminster suggested how bleak the budget would have to be, the watchdog's forecasts were improving.

Consider the Treasury's so-called "unbreakable" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be wholly funded by taxes: in late October, the watchdog reckoned it would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused morning television to interrupt its regular schedule. Several weeks before the actual budget, the country was put on alert: taxes would rise, with the primary cause being pessimistic numbers provided by the OBR, specifically its conclusion that the UK was less productive, putting more in but getting less out.

And lo! It came to pass. Despite what Telegraph editorials and Tory media appearances suggested over the weekend, that is basically what transpired during the budget, that proved to be big and painful and bleak.

The Misleading Justification

Where Reeves deceived us was her alibi, because those OBR forecasts didn't compel her actions. She might have chosen other choices; she might have provided alternative explanations, even on budget day itself. Before the recent election, Starmer pledged precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it's powerlessness that is evident in Reeves's breakfast speech. Our first Labour chancellor in 15 years casts herself to be an apolitical figure at the mercy of factors outside her influence: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, just not one the Labour party wishes to broadcast. From April 2029 UK workers and businesses are set to be paying another £26bn annually in tax – and most of that will not be funding improved healthcare, public services, nor enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Cash Actually Ends Up

Rather than going on services, over 50% of the additional revenue will instead give Reeves cushion against her own fiscal rules. Approximately 25% goes on paying for the government's own policy reversals. Examining the OBR's calculations and being as generous as possible towards Reeves, a mere 17% of the taxes will fund genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always an act of political theatre from George Osborne. This administration could and should abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have spent days railing against the idea that Reeves conforms to the stereotype of Labour chancellors, taxing hard workers to spend on shirkers. Labour backbenchers are applauding her budget for being a relief to their social concerns, protecting the disadvantaged. Each group are completely mistaken: The Chancellor's budget was primarily aimed at investment funds, speculative capital and the others in the financial markets.

The government could present a compelling argument in its defence. The forecasts provided by the OBR were deemed too small for comfort, particularly given that lenders demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries far greater debt. Combined with the policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the central bank to reduce its key lending rate.

You can see why those folk with Labour badges might not frame it in such terms when they visit #Labourdoorstep. As one independent adviser to Downing Street puts it, Reeves has "weaponised" the bond market to act as an instrument of discipline over her own party and the voters. This is why the chancellor cannot resign, no matter what pledges are broken. It's the reason Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer indicated recently.

A Lack of Political Vision and a Broken Pledge

What is absent here is the notion of statecraft, of mobilising the finance ministry and the central bank to forge a new accommodation with markets. Missing too is any innate understanding of voters,