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This allegation represents a grave matter: that Rachel Reeves has deceived Britons, spooking them into accepting massive additional taxes which could be spent on increased welfare payments. While hyperbolic, this isn't usual Westminster bickering; this time, the consequences could be damaging. A week ago, critics aimed at Reeves alongside Keir Starmer were calling their budget "disorderly". Today, it's denounced as lies, with Kemi Badenoch calling for Reeves to step down.

Such a grave accusation demands clear responses, so here is my view. Has the chancellor been dishonest? On the available evidence, no. She told no blatant falsehoods. However, notwithstanding Starmer's yesterday's remarks, that doesn't mean there's no issue here and we should move on. The Chancellor did mislead the public regarding the considerations shaping her choices. Was this all to funnel cash towards "benefits street", like the Tories assert? No, as the numbers demonstrate it.

A Standing Sustains A Further Hit, Yet Truth Must Prevail

The Chancellor has sustained a further hit to her standing, but, should facts still matter in politics, Badenoch ought to stand down her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will satisfy SW1's appetite for scandal.

But the real story is far stranger than media reports suggest, extending broader and deeper than the careers of Starmer and his class of '24. Fundamentally, this is a story about how much say you and I get in the governance of our own country. This should should worry everyone.

Firstly, on to Brass Tacks

After the OBR released last Friday some of the projections it shared with Reeves while she wrote the budget, the surprise was immediate. Not only has the OBR not done such a thing before (described as an "unusual step"), its numbers seemingly went against the chancellor's words. While rumors from Westminster were about how bleak the budget would have to be, the watchdog's predictions were improving.

Take the Treasury's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and other services would be completely paid for by taxes: in late October, the watchdog calculated this would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so extraordinary that it caused morning television to break from its usual fare. Weeks before the real budget, the nation was put on alert: taxes would rise, and the main reason being gloomy numbers provided by the OBR, specifically its finding that the UK had become less productive, investing more but yielding less.

And lo! It came to pass. Despite what Telegraph editorials and Tory media appearances suggested over the weekend, this is basically what happened during the budget, which was big and painful and bleak.

The Misleading Alibi

Where Reeves deceived us concerned her alibi, since those OBR forecasts didn't force her hand. She could have made other choices; she might have given other reasons, including on budget day itself. Before the recent election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The strength of the vote. The potential for national renewal."

A year on, and it's a lack of agency that is evident in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as a technocrat at the mercy of factors outside her influence: "In the context of the persistent challenges on our productivity … any chancellor of any party would be standing here today, confronting the choices that I face."

She certainly make a choice, only not the kind the Labour party cares to publicize. Starting April 2029 British workers as well as businesses will be contributing an additional £26bn a year in tax – and the majority of this will not be spent on better hospitals, public services, or enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Money Really Goes

Instead of being spent, over 50% of the extra cash will instead give Reeves cushion for her own fiscal rules. About 25% is allocated to covering the government's own U-turns. Reviewing the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the tax take will fund genuinely additional spending, such as scrapping the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, as it was always an act of theatrical cruelty from George Osborne. This administration should have abolished it immediately upon taking office.

The True Audience: Financial Institutions

Conservatives, Reform and the entire right-wing media have spent days railing against how Reeves fits the stereotype of Labour chancellors, taxing hard workers to spend on the workshy. Party MPs have been applauding her budget for being balm for their social concerns, safeguarding the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was primarily targeted towards investment funds, speculative capital and the others in the financial markets.

Downing Street can make a strong case in its defence. The forecasts from the OBR were insufficient for comfort, particularly given that lenders charge the UK the greatest borrowing cost among G7 rich countries – higher than France, that recently lost its leader, higher than Japan that carries far greater debt. Coupled with the measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget enables the central bank to cut its key lending rate.

It's understandable why those folk with Labour badges might not frame it this way when they're on the doorstep. As a consultant to Downing Street says, Reeves has effectively "weaponised" the bond market as a tool of discipline over her own party and the electorate. This is why the chancellor cannot resign, no matter what promises she breaks. It is also the reason Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer indicated recently.

Missing Statecraft , a Broken Promise

What's missing from this is any sense of strategic governance, of harnessing the finance ministry and the central bank to reach a fresh understanding with investors. Missing too is any innate understanding of voters,