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The accusation is a serious one: suggesting Rachel Reeves has lied to the British public, spooking them into accepting massive extra taxes which would be used for increased benefits. However hyperbolic, this isn't usual political bickering; on this occasion, the stakes could be damaging. A week ago, detractors of Reeves and Keir Starmer were labeling their budget "chaotic". Today, it's denounced as lies, with Kemi Badenoch calling for the chancellor to quit.

Such a grave accusation requires clear responses, so let me provide my view. Has the chancellor lied? On the available information, no. There were no whoppers. However, despite Starmer's recent comments, it doesn't follow that there's no issue here and we can all move along. Reeves did misinform the public regarding the considerations shaping her decisions. Was it to funnel cash to "welfare recipients", like the Tories assert? Certainly not, as the figures demonstrate this.

A Reputation Takes A Further Blow, Yet Truth Should Win Out

The Chancellor has taken a further hit to her standing, however, if facts still matter in politics, Badenoch should stand down her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will quench Westminster's appetite for scandal.

Yet the real story is much more unusual than the headlines indicate, and stretches broader and deeper than the careers of Starmer and his 2024 intake. At its heart, herein lies a story about how much say 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 recently some of the forecasts it provided to Reeves as she prepared the red book, the surprise was immediate. Not merely had the OBR not acted this way before (an "exceptional move"), its numbers apparently went against Reeves's statements. Even as leaks from Westminster suggested how bleak the budget was going to be, the OBR's own predictions were improving.

Consider the Treasury's most "iron-clad" fiscal rule, stating by 2030 daily spending on hospitals, schools, and other services would be completely paid for by taxes: at the end of October, the watchdog reckoned it would barely be met, albeit only by a minuscule margin.

Several days later, Reeves gave a press conference 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 would rise, and the primary cause being pessimistic numbers provided by the OBR, in particular its finding that the UK was less productive, putting more in but yielding less.

And so! It came to pass. Despite what Telegraph editorials combined with Tory broadcast rounds implied recently, that is essentially what happened at the budget, which was big and painful and bleak.

The Deceptive Justification

The way in which Reeves deceived us was her alibi, because these OBR forecasts didn't compel her actions. She might have made other choices; she could have provided other reasons, including during the statement. Prior to the recent election, Starmer promised exactly such public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, and it's powerlessness that jumps out from Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself to be an apolitical figure at the mercy of forces outside her influence: "In the context of the persistent challenges with our productivity … any chancellor of any party would be standing here today, facing the choices that I face."

She certainly make a choice, only not the kind Labour wishes to publicize. Starting April 2029 UK workers and businesses are set to be paying an additional £26bn a year in taxes – but most of that will not go towards spent on better hospitals, new libraries, nor happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Money Really Goes

Rather than being spent, more than 50% of the extra cash will instead provide Reeves cushion for her own fiscal rules. About 25% goes on covering the administration's U-turns. Reviewing the OBR's calculations and being as generous as possible to Reeves, only 17% of the taxes will fund actual new spending, such as scrapping the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it had long been a bit of political theatre by George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform and all of Blue Pravda have been railing against how Reeves conforms to the stereotype of left-wing finance ministers, taxing hard workers to fund the workshy. Party MPs have been applauding her budget for being balm for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was primarily aimed at investment funds, hedge funds and the others in the bond markets.

Downing Street could present a compelling argument in its defence. The margins from the OBR were too small to feel secure, especially given that lenders charge the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, that recently lost a prime minister, higher than Japan that carries way more debt. Combined with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the Bank of England to reduce interest rates.

It's understandable that those wearing Labour badges might not frame it in such terms next time they visit #Labourdoorstep. As a consultant to Downing Street puts it, Reeves has effectively "utilised" financial markets to act as a tool of discipline against Labour MPs and the voters. This is why Reeves cannot resign, regardless of which promises she breaks. It is also the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer indicated recently.

A Lack of Political Vision and a Broken Pledge

What's missing here is the notion of statecraft, of harnessing the finance ministry and the Bank to reach a fresh understanding with investors. Also absent is intuitive knowledge of voters,