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This charge represents a grave matter: suggesting Rachel Reeves has misled UK citizens, scaring them into accepting massive additional taxes which would be used for increased welfare payments. However exaggerated, this is not typical political sparring; on this occasion, the consequences could be damaging. Just last week, critics of Reeves and Keir Starmer had been calling their budget "chaotic". Today, it is denounced as lies, with Kemi Badenoch calling for the chancellor's resignation.

Such a grave charge demands straightforward answers, so here is my view. Has the chancellor been dishonest? On the available evidence, no. There were no major untruths. However, despite Starmer's recent comments, that doesn't mean there's no issue here and we can all move along. Reeves did mislead the public regarding the factors shaping her choices. Was this all to channel cash towards "benefits street", like the Tories assert? Certainly not, and the numbers prove this.

A Reputation Sustains Another Hit, Yet Truth Must Win Out

The Chancellor has sustained another hit to her standing, however, if facts continue to matter in politics, Badenoch ought to call off her lynch mob. Perhaps the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

But the real story is far stranger than the headlines suggest, extending wider and further than the careers of Starmer and his class of '24. At its heart, this is a story concerning what degree of influence you and I get in the governance of the nation. This should should worry everyone.

First, on to Brass Tacks

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

Take the Treasury's most "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and the rest would be completely paid for by taxes: in late October, the OBR calculated it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a media briefing so unprecedented that it caused morning television to interrupt its usual fare. Several weeks prior to the real budget, the nation was put on alert: taxes would rise, and the primary cause being gloomy numbers from the OBR, in particular its conclusion suggesting the UK had become less productive, investing more but yielding less.

And so! It happened. Notwithstanding what Telegraph editorials combined with Tory media appearances suggested recently, that is basically what happened at the budget, which was big and painful and bleak.

The Deceptive Alibi

Where Reeves deceived us concerned her justification, because these OBR forecasts didn't force her hand. She might have made other choices; she might have provided alternative explanations, including on budget day itself. Before last year's election, Starmer promised exactly such public influence. "The promise of democracy. The strength of the vote. The potential for national renewal."

One year later, and it's a lack of agency that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, only not the kind Labour cares to publicize. Starting April 2029 British workers and businesses are set to be paying another £26bn annually in taxes – but the majority of this will not go towards funding improved healthcare, public services, nor enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Instead of going on services, over 50% of this extra cash will instead give Reeves cushion against her self-imposed 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 a Labour chancellor, only 17% of the taxes will go on actual new spending, such as scrapping the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always an act of political theatre from George Osborne. This administration should have have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform and the entire right-wing media have spent days barking about how Reeves conforms to the stereotype of left-wing finance ministers, taxing strivers to fund shirkers. Party MPs are cheering her budget as a relief to their troubled consciences, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was primarily aimed at investment funds, hedge funds and the others in the financial markets.

The government can make a strong case for itself. The margins from the OBR were insufficient to feel secure, especially considering bond investors demand from the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, which lost a prime minister, and exceeding Japan which has way more debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget enables the central bank to reduce interest rates.

It's understandable why those folk with Labour badges might not frame it in such terms when they're on #Labourdoorstep. According to one independent adviser to Downing Street says, Reeves has "weaponised" the bond market to act as a tool of discipline against Labour MPs and the electorate. This is why Reeves can't resign, no matter what promises she breaks. It is also why Labour MPs must knuckle down and support measures to take billions off social security, just as Starmer promised yesterday.

Missing Statecraft , an Unfulfilled Pledge

What's missing here is any sense of statecraft, of harnessing the finance ministry and the central bank to reach a new accommodation with markets. Also absent is any intuitive knowledge of voters,