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The charge represents a grave matter: suggesting Rachel Reeves may have deceived UK citizens, frightening them to accept massive additional taxes that would be used for increased welfare payments. While hyperbolic, this isn't typical political sparring; this time, the consequences are higher. A week ago, detractors aimed at Reeves alongside Keir Starmer had been labeling their budget "chaotic". Today, it is denounced as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

This grave charge requires clear answers, therefore here is my view. Has the chancellor tell lies? On current evidence, no. There were no whoppers. However, despite Starmer's recent comments, it doesn't follow that there is nothing to see and we can all move along. The Chancellor did mislead the public regarding the considerations shaping her choices. Was it to funnel cash to "welfare recipients", as the Tories assert? Certainly not, as the figures prove this.

A Reputation Takes A Further Blow, Yet Truth Must Prevail

The Chancellor has taken a further blow to her reputation, however, should facts continue to matter in politics, Badenoch should stand down her attack dogs. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will satisfy SW1's appetite for scandal.

But the real story is much more unusual compared to the headlines suggest, extending wider and further beyond the political futures of Starmer and the class of '24. At its heart, this is an account about what degree of influence you and I get in the governance of the nation. And it should worry everyone.

First, on to the Core Details

When the OBR published last Friday some of the projections it provided to Reeves while she wrote the red book, the shock was instant. Not merely had the OBR not done such a thing before (an "unusual step"), its figures apparently went against the chancellor's words. Even as leaks from Westminster suggested how bleak the budget would have to be, the watchdog's predictions were getting better.

Take the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and other services must be completely funded by taxes: in late October, the watchdog calculated it would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a press conference so extraordinary that it caused breakfast TV to interrupt its usual fare. Weeks prior to the real budget, the country was put on alert: taxes would rise, and the main reason cited as gloomy numbers provided by the OBR, in particular its finding 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, that is basically what transpired during the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves deceived us was her alibi, since those OBR forecasts didn't force her hand. She might have chosen different options; she could have given alternative explanations, even on budget day itself. Prior to the recent election, Starmer promised exactly such public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, and it's powerlessness that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be an apolitical figure at the mercy of factors outside her influence: "In the context of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, just not the kind Labour cares to broadcast. Starting April 2029 UK workers as well as businesses will be contributing an additional £26bn a year in taxes – but most of that will not be funding better hospitals, new libraries, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, more than 50% of the extra cash will in fact give Reeves a buffer for her self-imposed budgetary constraints. About 25% is allocated to paying for the government's own policy reversals. Reviewing 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 a mere £2.5bn, as it had long been an act of theatrical cruelty from George Osborne. A Labour government could and should abolished it in its first 100 days.

The Real Target: The Bond Markets

The Tories, Reform and the entire right-wing media have been barking about the idea that Reeves conforms to the stereotype of left-wing finance ministers, taxing strivers to fund the workshy. Labour backbenchers have been cheering her budget as balm for their social concerns, protecting the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, speculative capital and participants within the financial markets.

The government could present a strong case for itself. The forecasts from the OBR were deemed insufficient for comfort, particularly given that bond investors charge the UK the highest interest rate among G7 rich countries – exceeding that of France, that recently lost its leader, and exceeding Japan which has way more debt. Coupled with our policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves can say this budget allows the central bank to reduce its key lending rate.

It's understandable that those folk with red rosettes may choose not to frame it this way when they visit the doorstep. As a consultant for Downing Street says, Reeves has effectively "weaponised" the bond market to act as a tool of discipline over Labour MPs and the voters. This is why Reeves cannot resign, regardless of which promises she breaks. It's the reason Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft , a Broken Pledge

What's missing here is any sense of strategic governance, of harnessing the finance ministry and the Bank to reach a new accommodation with markets. Also absent is any innate understanding of voters,