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The charge is a serious one: that Rachel Reeves may have misled the British public, scaring them into accepting billions in extra taxes which could be used for higher welfare payments. However hyperbolic, this is not usual Westminster bickering; on this occasion, the stakes are higher. A week ago, critics aimed at Reeves and Keir Starmer had been labeling their budget "chaotic". Today, it's denounced as falsehoods, and Kemi Badenoch demanding Reeves to step down.

This serious charge demands clear answers, so let me provide my view. Did the chancellor lied? On the available information, no. She told no blatant falsehoods. But, despite Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we should move on. The Chancellor did mislead the public about the factors informing her choices. Was this all to funnel cash towards "welfare recipients", as the Tories claim? Certainly not, as the numbers prove it.

A Reputation Takes Another Hit, Yet Truth Must Win Out

The Chancellor has sustained a further hit to her reputation, however, should facts still have anything to do with politics, Badenoch should call off 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 Westminster's appetite for scandal.

But the real story is far stranger than media reports indicate, extending wider and further beyond the political futures of Starmer and the class of '24. At its heart, herein lies an account about how much say the public get in the running of the nation. This should should worry everyone.

First, to Brass Tacks

When the OBR published recently a portion of the forecasts it shared with Reeves while she wrote the red book, the surprise was instant. Not merely had the OBR not done such a thing before (described as an "unusual step"), its numbers apparently went against the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Consider the Treasury's most "unbreakable" rule, that by 2030 daily spending on hospitals, schools, and other services must be completely funded by taxes: at the end of October, the OBR reckoned this would barely be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so extraordinary it forced breakfast TV to interrupt its usual fare. Several weeks before the real budget, the country was warned: taxes were going up, and the main reason being pessimistic numbers from the OBR, in particular its finding suggesting the UK had become less efficient, investing more but getting less out.

And so! It happened. Despite what Telegraph editorials and Tory media appearances implied over the weekend, that is essentially what happened during the budget, that proved to be big and painful and bleak.

The Misleading Alibi

The way in which Reeves misled us was her justification, since these OBR forecasts did not force her hand. She might have chosen different options; she could have given other reasons, even on budget day itself. Prior to the recent election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is a lack of agency that is evident in Reeves's breakfast speech. The first Labour chancellor in 15 years portrays herself as an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any political stripe would be in this position today, facing the decisions that I face."

She certainly make decisions, just not the kind Labour wishes to broadcast. From April 2029 UK workers as well as businesses will be paying an additional £26bn a year in taxes – but the majority of this will not go towards spent on improved healthcare, new libraries, or happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "benefits street".

Where the Money Actually Ends Up

Instead of going on services, more than 50% of the extra cash will in fact give Reeves cushion against her self-imposed budgetary constraints. Approximately 25% goes on paying for the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the tax take will go on actual new spending, for example abolishing the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, because it had long been an act of political theatre by George Osborne. A Labour government should have abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform and all of Blue Pravda have spent days barking about the idea that Reeves conforms to the stereotype of Labour chancellors, taxing hard workers to spend on the workshy. Labour backbenchers are applauding her budget as balm for their social concerns, protecting the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily aimed at investment funds, speculative capital and the others in the financial markets.

The government can make a compelling argument for itself. The margins provided by the OBR were too small to feel secure, particularly given that bond investors charge the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, which lost its leader, higher than Japan which has far greater debt. Coupled with our policies to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the Bank of England to reduce its key lending rate.

You can see why those folk with Labour badges might not couch it in such terms next time they're on the doorstep. As one independent adviser for Downing Street puts it, Reeves has effectively "weaponised" financial markets as a tool of discipline over her own party and the electorate. This is why the chancellor can't resign, regardless of which pledges are broken. It's the reason Labour MPs will have to knuckle down and vote that cut billions from social security, just as Starmer promised yesterday.

A Lack of Political Vision , an Unfulfilled Pledge

What's missing from this is any sense of statecraft, of mobilising the Treasury and the central bank to forge a new accommodation with investors. Missing too is any innate understanding of voters,