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The allegation represents a grave matter: that Rachel Reeves has deceived UK citizens, spooking them to accept billions in additional taxes that would be used for increased benefits. While exaggerated, this isn't usual political bickering; on this occasion, the stakes are higher. A week ago, detractors of Reeves and Keir Starmer had been labeling their budget "chaotic". Now, it's branded as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

This serious charge demands clear answers, so let me provide my assessment. Did the chancellor lied? Based on current information, apparently not. She told no blatant falsehoods. But, despite Starmer's recent comments, that doesn't mean there is no issue here and we can all move along. Reeves did mislead the public regarding the factors shaping her decisions. Was it to funnel cash to "benefits street", like the Tories assert? No, and the numbers prove this.

A Standing Takes A Further Hit, Yet Truth Must Win Out

The Chancellor has sustained another blow to her reputation, however, should facts continue to matter in politics, Badenoch ought to call off her attack dogs. Perhaps the stepping down recently of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the true narrative is much more unusual compared to media reports indicate, extending broader and deeper beyond the political futures of Starmer and the class of '24. Fundamentally, this is an account about how much say you and I get in the governance of our own country. This should concern everyone.

Firstly, to Brass Tacks

After the OBR released recently a portion of the projections it provided to Reeves while she wrote the red book, the surprise was instant. Not merely had the OBR never acted this way before (an "unusual step"), its figures seemingly contradicted Reeves's statements. Even as rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Take the government's most "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest must be completely funded by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a media briefing so extraordinary it forced morning television to interrupt its usual fare. Several weeks before the real budget, the nation was put on alert: taxes would rise, and the primary cause cited as gloomy numbers provided by the OBR, specifically its finding suggesting the UK was less efficient, investing more but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds implied over the weekend, this is essentially what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Alibi

The way in which Reeves misled us was her alibi, because these OBR forecasts did not compel her actions. She might have chosen other choices; she could have provided other reasons, even on budget day itself. Prior to last year's election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it's powerlessness that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself as an apolitical figure at the mercy of forces beyond her control: "In the context of the persistent challenges on our productivity … any finance minister of any party would be standing here today, confronting the decisions that I face."

She did make a choice, only not one Labour wishes to broadcast. From April 2029 British workers as well as businesses are set to be contributing another £26bn annually in tax – and the majority of this will not be funding better hospitals, public services, or happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of this additional revenue will instead give Reeves cushion for her own fiscal rules. About 25% goes on paying for the government's own policy reversals. Examining the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the taxes will go on genuinely additional spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always an act of theatrical cruelty from George Osborne. This administration should have abolished it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform and all of Blue Pravda have spent days barking about the idea that Reeves conforms to the caricature of Labour chancellors, taxing strivers to fund the workshy. Party MPs are applauding her budget for being balm for their troubled consciences, safeguarding the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was primarily targeted towards investment funds, hedge funds and participants within the financial markets.

The government could present a compelling argument for itself. The margins provided by the OBR were deemed too small to feel secure, especially given that lenders demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan which has way more debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the Bank of England to cut interest rates.

It's understandable why those wearing red rosettes might not frame it this way when they visit the doorstep. As one independent adviser for Downing Street says, Reeves has "weaponised" the bond market as an instrument of discipline over her own party and the electorate. It's why the chancellor cannot resign, regardless of which pledges are broken. It is also why Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer indicated recently.

Missing Statecraft , an Unfulfilled Pledge

What's missing here is any sense of strategic governance, of mobilising the Treasury and the central bank to reach a new accommodation with investors. Missing too is any innate understanding of voters,