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The charge represents a grave matter: that Rachel Reeves has deceived UK citizens, scaring them into accepting billions in additional taxes which could be spent on higher benefits. However hyperbolic, this isn't typical Westminster sparring; on this occasion, the consequences could be damaging. A week ago, detractors aimed at Reeves and Keir Starmer had been calling their budget "uncoordinated". Now, it's branded as lies, with Kemi Badenoch calling for the chancellor to quit.

This grave charge requires clear answers, so here is my assessment. Did the chancellor been dishonest? Based on current evidence, no. She told no blatant falsehoods. However, notwithstanding Starmer's recent comments, that doesn't mean there is no issue here and we can all move along. Reeves did mislead the public regarding the factors informing her decisions. Was it to channel cash towards "welfare recipients", as the Tories assert? Certainly not, as the figures demonstrate this.

A Standing Takes A Further Hit, But Facts Must Win Out

The Chancellor has sustained another hit to her reputation, however, if facts still have anything to do with politics, Badenoch should call off her attack dogs. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's thirst for blood.

Yet the true narrative is far stranger than the headlines suggest, extending broader and deeper than the careers of Starmer and his class of '24. Fundamentally, this is a story concerning what degree of influence the public get over the governance of the nation. This should concern everyone.

First, to Brass Tacks

When the OBR released last Friday some of the forecasts it shared with Reeves as she wrote the red book, the surprise was immediate. Not only has the OBR never done such a thing before (an "exceptional move"), its figures apparently went against the chancellor's words. Even as rumors from Westminster suggested how bleak the budget was going to be, the OBR's own predictions were getting better.

Take the government's so-called "iron-clad" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and other services would be wholly paid for by taxes: in late October, the OBR reckoned it would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so extraordinary that it caused breakfast TV to break from its regular schedule. Weeks before the actual budget, the nation was warned: taxes were going up, and the primary cause cited as pessimistic numbers provided by the OBR, specifically its finding suggesting the UK was less efficient, investing more but getting less out.

And lo! It came to pass. Despite the implications from Telegraph editorials and Tory media appearances implied recently, that is essentially what happened at the budget, that proved to be big and painful and bleak.

The Deceptive Alibi

The way in which Reeves deceived us was her alibi, because these OBR forecasts did not compel her actions. She could have made other choices; she might have provided other reasons, even on budget day itself. Before the recent election, Starmer pledged exactly such people power. "The promise of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that is evident in Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself as a technocrat at the mercy of forces outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She certainly make a choice, only not one the Labour party wishes to publicize. From April 2029 British workers and businesses will be paying an additional £26bn a year in taxes – but the majority of this will not go towards spent on better hospitals, new libraries, or happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Money Actually Ends Up

Rather than going on services, over 50% of this additional revenue will instead give Reeves cushion for her self-imposed budgetary constraints. Approximately 25% goes on covering the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible towards a Labour chancellor, a mere 17% of the tax take will go on actual new spending, such as abolishing the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, because it had long been an act of political theatre by George Osborne. A Labour government should have have binned it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform along with the entire right-wing media have spent days barking about how Reeves conforms to the caricature of left-wing finance ministers, soaking strivers to fund shirkers. Labour backbenchers are cheering her budget for being a relief to their troubled consciences, safeguarding the disadvantaged. Both sides could be 180-degrees wrong: Reeves's budget was largely aimed at asset managers, speculative capital and participants within the bond markets.

Downing Street can make a compelling argument for itself. The margins from the OBR were too small to feel secure, particularly given that lenders demand from the UK the highest interest rate among G7 rich countries – higher than France, which lost a prime minister, and exceeding Japan which has way more debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue this budget enables the Bank of England to cut its key lending rate.

You can see that those wearing Labour badges might not couch it this way next time they're on the doorstep. According to one independent adviser to Downing Street says, Reeves has "utilised" financial markets to act as a tool of discipline against her own party and the electorate. It's why the chancellor cannot resign, regardless of which pledges she breaks. It is also the reason Labour MPs must knuckle down and vote that cut billions from social security, just as Starmer promised yesterday.

Missing Statecraft and an Unfulfilled Promise

What's missing from this is the notion of statecraft, of mobilising the Treasury and the central bank to forge a fresh understanding with markets. Missing too is any innate understanding of voters,