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The charge represents a grave matter: suggesting Rachel Reeves has misled Britons, scaring them to accept billions in additional taxes that would be used for increased welfare payments. While exaggerated, this isn't usual political sparring; this time, the consequences are more serious. Just last week, critics aimed at Reeves and Keir Starmer had been labeling their budget "disorderly". Now, it's branded as falsehoods, with Kemi Badenoch demanding Reeves to step down.

This serious accusation requires clear answers, so let me provide my assessment. Has the chancellor lied? On the available information, apparently not. She told no whoppers. But, despite Starmer's recent remarks, it doesn't follow that there is nothing to see and we should move on. Reeves did misinform the public about the considerations shaping her choices. Was this all to channel cash to "welfare recipients", like the Tories claim? Certainly not, and the numbers prove it.

A Standing Sustains Another Hit, But Facts Must Prevail

The Chancellor has sustained another hit to her reputation, but, should facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will quench SW1's appetite for scandal.

But the true narrative is much more unusual compared to media reports indicate, and stretches wider and further than the careers of Starmer and his 2024 intake. Fundamentally, herein lies an account about what degree of influence the public get in the running of our own country. This should should worry everyone.

First, to the Core Details

After the OBR released recently some of the forecasts it shared with Reeves as she prepared the red book, the surprise was immediate. Not merely had the OBR never acted this way before (an "rare action"), its numbers apparently contradicted Reeves's statements. Even as rumors from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were improving.

Consider the government's so-called "iron-clad" rule, stating by 2030 daily spending on hospitals, schools, and other services would be wholly funded by taxes: at the end of October, the watchdog reckoned this would barely be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so extraordinary it forced breakfast TV to interrupt its regular schedule. Weeks prior to the real budget, the country was warned: taxes would rise, with the primary cause being pessimistic numbers provided by the OBR, in particular its finding that the UK was less efficient, investing more but getting less out.

And so! It happened. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is basically what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us concerned her justification, because those OBR forecasts didn't compel her actions. She might have chosen different options; she might have provided other reasons, including on budget day itself. Before last year's election, Starmer pledged exactly such people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, and it is powerlessness that jumps out from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure at the mercy of forces outside her influence: "In the context of the persistent challenges with our productivity … any finance minister of any political stripe would be in this position today, confronting the decisions that I face."

She certainly make a choice, only not the kind the Labour party wishes to publicize. From 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 funding improved healthcare, public services, nor enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Rather than going on services, over 50% of the additional revenue will instead give Reeves cushion for her self-imposed fiscal rules. About 25% is allocated to paying for the administration's U-turns. Reviewing the OBR's calculations and being as generous as possible to a Labour chancellor, a mere 17% of the taxes will fund actual new spending, for example abolishing the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, because it was always an act of theatrical cruelty by George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and all of right-wing media have been railing against how Reeves fits the stereotype of Labour chancellors, taxing strivers to fund shirkers. Labour backbenchers are applauding her budget for being balm for their troubled consciences, protecting the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was primarily targeted towards investment funds, speculative capital and the others in the bond markets.

Downing Street can make a compelling argument for itself. The margins provided by the OBR were too small for comfort, especially given that bond investors demand from the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan allows the central bank to reduce interest rates.

You can see that those folk with Labour badges may choose not to frame it this way next time they're on #Labourdoorstep. As a consultant to Downing Street says, Reeves has effectively "utilised" the bond market to act as an instrument of discipline over Labour MPs and the electorate. This is the reason the chancellor can't resign, no matter what promises she breaks. It is also why Labour MPs must fall into line and vote that cut billions from social security, as Starmer indicated recently.

A Lack of Political Vision , an Unfulfilled Promise

What's missing from this is any sense of strategic governance, of harnessing the Treasury and the central bank to forge a fresh understanding with investors. Missing too is intuitive knowledge of voters,