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The accusation carries significant weight: suggesting Rachel Reeves may have misled Britons, frightening them into accepting billions in additional taxes that could be spent on increased benefits. While hyperbolic, this isn't usual Westminster sparring; this time, the consequences could be damaging. Just last week, detractors of Reeves and Keir Starmer were calling their budget "disorderly". Today, it's denounced as lies, and Kemi Badenoch calling for Reeves to step down.

This grave charge requires straightforward responses, therefore here is my assessment. Has the chancellor lied? Based on the available information, no. She told no blatant falsehoods. But, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there's no issue here and we can all move along. Reeves did misinform the public regarding the factors shaping her decisions. Was this all to channel cash towards "benefits street", as the Tories claim? Certainly not, as the numbers demonstrate this.

A Reputation Takes A Further Blow, But Facts Must Prevail

The Chancellor has taken another blow to her reputation, however, if facts still have anything to do with politics, Badenoch ought to 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 Westminster's thirst for blood.

Yet the true narrative is much more unusual compared to the headlines suggest, and stretches wider and further than the careers of Starmer and his 2024 intake. At its heart, this is a story about what degree of influence you and I get in the governance of our own country. And it should worry you.

Firstly, to the Core Details

When the OBR published recently some of the projections it shared with Reeves while she prepared the budget, the shock was immediate. Not only has the OBR not acted this way before (described as an "unusual step"), its figures seemingly contradicted Reeves's statements. While rumors from Westminster were about the grim nature of the budget was going to be, the watchdog's forecasts were improving.

Consider the government's so-called "unbreakable" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be completely paid for by taxes: in late October, the watchdog calculated it would just about be met, albeit by a tiny margin.

Several days later, Reeves held a press conference so unprecedented that it caused morning television to interrupt its regular schedule. Weeks before the actual budget, the nation was put on alert: taxes would rise, and the primary cause cited as gloomy numbers provided by the OBR, specifically its conclusion suggesting the UK had become less efficient, investing more but getting less out.

And so! It came to pass. Despite the implications from Telegraph editorials combined with Tory broadcast rounds implied recently, that is essentially what transpired at the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us concerned her alibi, since those OBR forecasts didn't compel her actions. She might have made other choices; she might have given alternative explanations, even on budget day itself. Before last year's election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it is powerlessness that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces outside her influence: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, just not one the Labour party wishes to publicize. Starting April 2029 British workers as well as businesses are set to be paying another £26bn annually in tax – and most of that will not go towards funding improved healthcare, new libraries, nor happier lives. Regardless of what nonsense comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of the additional revenue will instead provide Reeves a buffer against her self-imposed budgetary constraints. About 25% is allocated to covering the government's own U-turns. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the tax take will go on actual new spending, such as abolishing the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it was always an act of political theatre from George Osborne. This administration could and should abolished it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform and all of right-wing media have spent days barking about the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing strivers to fund the workshy. Party MPs are applauding her budget as balm to their social concerns, safeguarding the disadvantaged. Each group are completely mistaken: The Chancellor's budget was largely aimed at asset managers, speculative capital and the others in the bond markets.

Downing Street could present a compelling argument in its defence. The forecasts from the OBR were deemed insufficient for comfort, particularly considering lenders charge the UK the highest interest rate of all G7 rich countries – higher than France, that recently lost its leader, higher than Japan that carries far greater debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan allows the Bank of England to reduce its key lending rate.

You can see that those folk with Labour badges might not frame it in such terms when they visit #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has effectively "weaponised" the bond market to act as a tool of discipline against Labour MPs and the electorate. This is the reason Reeves can't resign, regardless of which promises she breaks. It's why Labour MPs must fall into line and vote that cut billions from social security, as Starmer promised recently.

A Lack of Statecraft and a Broken Promise

What is absent here is the notion of strategic governance, of harnessing the finance ministry and the central bank to reach a new accommodation with investors. Also absent is any intuitive knowledge of voters,