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The allegation is a serious one: that Rachel Reeves has deceived the British public, spooking them into accepting massive additional taxes which could be funneled into higher benefits. While exaggerated, this is not typical Westminster bickering; this time, the consequences are more serious. A week ago, critics aimed at Reeves and Keir Starmer had been calling their budget "a shambles". Now, it's denounced as lies, with Kemi Badenoch demanding Reeves to step down.

Such a serious accusation demands clear answers, therefore let me provide my view. Did the chancellor lied? Based on the available information, no. There were no whoppers. However, despite Starmer's yesterday's remarks, that doesn't mean there is nothing to see and we can all move along. The Chancellor did mislead the public about the considerations informing her choices. Was it to channel cash towards "welfare recipients", like the Tories assert? No, as the numbers prove this.

A Reputation Sustains Another Hit, Yet Truth Should Prevail

The Chancellor has taken a further blow to her standing, however, if facts continue to matter in politics, Badenoch ought to stand down her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

Yet the real story is far stranger compared to media reports indicate, and stretches wider and further than the political futures of Starmer and his class of '24. Fundamentally, this is an account about what degree of influence you and I get in the governance of the nation. And it concern you.

Firstly, to the Core Details

When the OBR published recently some of the forecasts it shared with Reeves as she wrote the red book, the shock was immediate. Not only had the OBR not done such a thing before (an "unusual step"), its figures apparently went against Reeves's statements. While rumors from Westminster were about how bleak the budget was going to be, the OBR's own predictions were getting better.

Consider the government's most "unbreakable" rule, stating by 2030 daily spending for hospitals, schools, and other services must be completely funded by taxes: at the end of October, the OBR reckoned it would just about be met, albeit by a tiny margin.

A few days later, Reeves gave a press conference so unprecedented it forced morning television to interrupt its usual fare. Several weeks prior to the real budget, the country was warned: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, in particular its conclusion that the UK had become less productive, investing more but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory media appearances suggested over the weekend, that is basically what happened at the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

Where Reeves misled us concerned her justification, since those OBR forecasts did not compel her actions. She might have made other choices; she could have given other reasons, even on budget day itself. Prior to last year's election, Starmer promised exactly such people power. "The promise of democracy. The power of the vote. The potential for national renewal."

One year later, yet it is powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat at the mercy of forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, just not one the Labour party wishes to publicize. From April 2029 British workers as well as businesses will be paying an additional £26bn a year in tax – and the majority of this will not be funding improved healthcare, new libraries, or happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Cash Really Goes

Rather than being spent, more than 50% of the additional revenue will instead give Reeves cushion against her self-imposed fiscal rules. About 25% is allocated to paying for the administration's U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the tax take will fund actual new spending, such as scrapping the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, because it had long been an act of political theatre from George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have been railing against the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to spend on the workshy. Party MPs are applauding her budget for being a relief to their social concerns, safeguarding the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was largely targeted towards asset managers, speculative capital and participants within the bond markets.

Downing Street could present a compelling argument for itself. The margins provided by the OBR were deemed too small to feel secure, particularly considering lenders demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost its leader, higher than Japan that carries far greater debt. Combined with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue this budget enables the central bank to cut its key lending rate.

It's understandable why those wearing Labour badges may choose not to frame it this way next time they visit the doorstep. As a consultant for Downing Street puts it, Reeves has "utilised" the bond market as a tool of discipline against Labour MPs and the electorate. This is the reason Reeves can't resign, no matter what pledges are broken. It is also why Labour MPs will have to fall into line and vote that cut billions from social security, as Starmer promised recently.

Missing Statecraft , an Unfulfilled Promise

What is absent here is any sense of strategic governance, of harnessing the Treasury and the Bank to forge a fresh understanding with markets. Also absent is innate understanding of voters,