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This accusation carries significant weight: suggesting Rachel Reeves has deceived UK citizens, scaring them to accept billions in extra taxes that would be spent on higher benefits. While hyperbolic, this is not usual Westminster sparring; on this occasion, the consequences could be damaging. A week ago, critics of Reeves alongside Keir Starmer had been labeling their budget "a mess". Now, it's branded as lies, with Kemi Badenoch demanding the chancellor to quit.

This grave accusation demands straightforward answers, therefore let me provide my view. Has the chancellor tell lies? Based on the available information, apparently not. There were no whoppers. However, notwithstanding Starmer's recent comments, it doesn't follow that there's no issue here and we can all move along. Reeves did misinform the public regarding the factors informing her decisions. Was it to funnel cash to "benefits street", like the Tories claim? Certainly not, as the figures demonstrate this.

A Reputation Sustains Another Hit, Yet Truth Should Win Out

The Chancellor has sustained another hit to her reputation, however, if facts still have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will quench SW1's appetite for scandal.

Yet the true narrative is far stranger than the headlines indicate, extending broader and deeper than the political futures of Starmer and his 2024 intake. Fundamentally, herein lies a story concerning what degree of influence you and I get over the governance of the nation. This should should worry you.

First, on to the Core Details

After the OBR released last Friday some of the projections it shared with Reeves as she wrote the budget, the shock was instant. Not only has the OBR not done such a thing before (an "rare action"), its numbers apparently contradicted the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget was going to be, the OBR's own predictions were improving.

Consider the government's so-called "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and the rest would be wholly paid for by taxes: in late October, the watchdog calculated it would just about be met, albeit by a minuscule margin.

Several days later, Reeves gave a press conference so unprecedented it forced breakfast TV to interrupt its usual fare. Several weeks prior to the real budget, the country was put on alert: taxes were going up, with the main reason cited as gloomy numbers provided by the OBR, in particular its conclusion that the UK had become less productive, investing more but yielding less.

And lo! It happened. Notwithstanding what Telegraph editorials and Tory media appearances suggested recently, that is essentially what happened during the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

Where Reeves deceived us concerned her alibi, since those OBR forecasts didn't force her hand. She might have made different options; she might have given alternative explanations, 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."

A year on, yet it's powerlessness that is evident from Reeves's pre-budget speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She did make a choice, just not the kind the Labour party wishes to broadcast. Starting April 2029 British workers and businesses are set to be paying an additional £26bn a year in taxes – but most of that will not be funding better hospitals, new libraries, nor enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, more than 50% of this extra cash will instead provide Reeves cushion against her own fiscal rules. About 25% is allocated to paying for the administration's U-turns. Reviewing the watchdog's figures and being as generous as possible towards Reeves, only 17% of the taxes will fund actual new spending, such as abolishing the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, because it had long been an act of theatrical cruelty by George Osborne. This administration could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform and the entire Blue Pravda have been railing against the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to fund shirkers. Party MPs are cheering her budget for being a relief for their social concerns, safeguarding the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was largely targeted towards investment funds, hedge funds and participants within the bond markets.

Downing Street can make a strong case for itself. The forecasts from the OBR were too small to feel secure, particularly considering lenders demand from the UK the greatest borrowing cost of all G7 rich countries – higher than France, that recently lost a prime minister, higher than Japan that carries far greater debt. Coupled with our measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan allows the Bank of England to cut interest rates.

You can see that those wearing Labour badges may choose not to couch it this way next time they're on #Labourdoorstep. According to one independent adviser to Downing Street puts it, Reeves has effectively "weaponised" financial markets to act as a tool of control against her own party and the voters. This is the reason 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 that cut billions from social security, as Starmer indicated recently.

Missing Political Vision and an Unfulfilled Pledge

What's missing from this is the notion of statecraft, of mobilising the Treasury and the central bank to forge a fresh understanding with markets. Missing too is any intuitive knowledge of voters,