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The charge represents a grave matter: that Rachel Reeves has misled UK citizens, scaring them to accept billions in extra taxes that could be used for higher welfare payments. While hyperbolic, this is not usual Westminster bickering; this time, the stakes are higher. A week ago, critics of Reeves and Keir Starmer were labeling their budget "a shambles". Today, it is denounced as lies, with Kemi Badenoch demanding the chancellor's resignation.

Such a serious accusation demands clear responses, therefore let me provide my view. Did the chancellor been dishonest? On current evidence, apparently not. There were no whoppers. However, despite Starmer's yesterday's remarks, that doesn't mean there's nothing to see and we can all move along. The Chancellor did mislead the public about the considerations informing her decisions. Was this all to funnel cash to "welfare recipients", like the Tories assert? No, as the figures prove it.

A Reputation Sustains Another Hit, But Facts Should Win Out

Reeves has taken another hit to her standing, however, if facts still matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's thirst for blood.

Yet the real story is far stranger compared to the headlines suggest, extending broader and deeper 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 over the governance of our own country. This should concern everyone.

Firstly, on to the Core Details

After the OBR released recently some of the forecasts it shared with Reeves while she wrote the budget, the shock was immediate. Not merely had the OBR not done such a thing before (an "unusual step"), its figures seemingly contradicted the chancellor's words. Even as rumors from Westminster were about how bleak the budget would have to be, the OBR's own predictions were improving.

Consider the government's so-called "unbreakable" rule, stating by 2030 daily spending for hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the watchdog reckoned this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented that it caused breakfast TV to break from its usual fare. Weeks before the actual budget, the country was warned: taxes were going up, and the primary cause being pessimistic numbers from the OBR, in particular its conclusion that the UK was less efficient, putting more in but yielding less.

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

The Misleading Justification

The way in which Reeves deceived us was her alibi, because those OBR forecasts did not force her hand. She might have chosen other choices; she could have provided other reasons, including during the statement. Prior to the recent election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure buffeted by factors beyond her control: "In the context of the persistent challenges with our productivity … any chancellor of any party would be standing here today, confronting the choices that I face."

She did make a choice, only not one Labour cares to publicize. From April 2029 UK workers as well as businesses are set to be contributing another £26bn annually in tax – but the majority of this will not go towards funding improved healthcare, new libraries, or happier lives. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Cash Really Goes

Instead of being spent, over 50% of the additional revenue will instead give Reeves a buffer for her self-imposed budgetary constraints. About 25% goes on paying for the government's own policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt towards Reeves, only 17% of the taxes will go on genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always a bit of theatrical cruelty by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform and all of Blue Pravda have been railing against the idea that Reeves fits the caricature of Labour chancellors, soaking hard workers to fund the workshy. Labour backbenchers are applauding her budget for being balm to their social concerns, protecting the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and the others in the bond markets.

The government can make a compelling argument in its defence. The margins from the OBR were deemed insufficient to feel secure, especially given that bond investors charge the UK the highest interest rate of all G7 developed nations – higher than France, which lost its leader, and exceeding Japan that carries way more debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the Bank of England to cut interest rates.

It's understandable that those wearing red rosettes may choose not to frame it in such terms next time they're on the doorstep. According to one independent adviser for Downing Street says, Reeves has effectively "utilised" the bond market to act as an instrument of control against her own party and the electorate. It's the reason the chancellor cannot resign, no matter what pledges she breaks. It is also why Labour MPs will have to knuckle down and vote that cut billions from social security, just as Starmer promised yesterday.

Missing Statecraft , a Broken Pledge

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