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This allegation represents a grave matter: suggesting Rachel Reeves has misled Britons, scaring them into accepting billions in extra taxes which would be used for higher benefits. However exaggerated, this isn't usual Westminster bickering; on this occasion, the stakes 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, and Kemi Badenoch calling for the chancellor to quit.

This serious accusation demands straightforward answers, so here is my assessment. Has the chancellor lied? Based on the available evidence, apparently not. She told no major untruths. But, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we should move on. Reeves did misinform the public about the considerations shaping her choices. Was this all to channel cash to "benefits street", as the Tories claim? No, as the numbers demonstrate it.

A Reputation Sustains Another Blow, But Facts Should Prevail

Reeves has taken a further blow to her standing, but, should facts still have anything to do with politics, Badenoch ought to stand down her attack dogs. Maybe the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the true narrative is far stranger than media reports indicate, and stretches wider and further beyond the careers of Starmer and his 2024 intake. Fundamentally, this is an account concerning what degree of influence the public get over the governance of our own country. This should should worry you.

Firstly, to the Core Details

After the OBR released last Friday a portion of the forecasts it shared with Reeves while she wrote the red book, the shock was instant. Not merely has the OBR not acted this way before (an "unusual step"), its figures apparently contradicted Reeves's statements. While rumors from Westminster suggested the grim nature of the budget was going to be, the OBR's own forecasts were getting better.

Consider the Treasury's so-called "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and the rest must be completely funded by taxes: at the end of October, the watchdog calculated this would just about be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented it forced breakfast TV to break from its usual fare. Several weeks prior to the real budget, the country was put on alert: taxes were going up, and the main reason being gloomy numbers provided by the OBR, specifically its finding that the UK was less efficient, investing more but getting less out.

And lo! It happened. Despite what Telegraph editorials combined with Tory media appearances suggested over the weekend, this is essentially what transpired during the budget, that proved to be big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us was her alibi, since these OBR forecasts didn't force her hand. She might have chosen other choices; she could have given alternative explanations, even on budget day itself. Before the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, and it is a lack of agency that jumps out in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure at the mercy of forces outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any party would be standing here today, facing the choices that I face."

She certainly make decisions, just not the kind the Labour party wishes to publicize. From April 2029 British workers and businesses are set to be contributing an additional £26bn annually in taxes – but the majority of this will not go towards funding improved healthcare, new libraries, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Rather than being spent, over 50% of the additional revenue will instead give Reeves cushion for her self-imposed fiscal rules. About 25% goes on covering the government's own U-turns. Examining the watchdog's figures and being as generous as possible to a Labour chancellor, a mere 17% of the tax take will fund actual new spending, for example abolishing the two-child cap on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it was always a bit of theatrical cruelty by George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform along with the entire Blue Pravda have been railing against how Reeves fits the caricature of left-wing finance ministers, taxing strivers to fund the workshy. Party MPs have been cheering her budget for being a relief to their troubled consciences, protecting the most vulnerable. Both sides could be completely mistaken: The Chancellor's budget was largely targeted towards investment funds, hedge funds and participants within the bond markets.

Downing Street can make a strong case in its defence. The forecasts provided by the OBR were deemed too small to feel secure, particularly considering lenders charge the UK the highest interest rate among G7 rich countries – higher than France, that recently lost its leader, higher than Japan which has way more debt. Combined with the policies to hold down fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget enables the central bank to reduce interest rates.

You can see why those folk with Labour badges might not couch it in such terms when they visit the doorstep. According to a consultant to Downing Street says, Reeves has "weaponised" the bond market as an instrument of discipline over Labour MPs and the voters. It's the reason the chancellor can't resign, no matter what promises she breaks. It is also the reason Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer promised recently.

Missing Statecraft and an Unfulfilled Pledge

What's missing from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to reach a new accommodation with markets. Missing too is intuitive knowledge of voters,