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This charge carries significant weight: that Rachel Reeves may have deceived Britons, spooking them into accepting massive extra taxes which could be spent on higher benefits. However hyperbolic, this isn't usual political bickering; on this occasion, the stakes could be damaging. A week ago, critics of Reeves and Keir Starmer were labeling their budget "a mess". Today, it's denounced as falsehoods, with Kemi Badenoch calling for Reeves to step down.

This serious accusation requires straightforward responses, therefore here is my assessment. Has the chancellor tell lies? On the available evidence, no. She told no major untruths. However, notwithstanding Starmer's yesterday's comments, it doesn't follow that there's no issue here and we should move on. The Chancellor did misinform the public regarding the factors informing her decisions. Was this all to funnel cash to "welfare recipients", as the Tories claim? No, and the figures prove it.

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

The Chancellor has taken another hit to her reputation, however, if facts still have anything to do with politics, Badenoch ought to stand down her attack dogs. Maybe the stepping down yesterday of OBR head, Richard Hughes, due to the leak of its own documents will satisfy Westminster's appetite for scandal.

Yet the real story is far stranger compared to the headlines suggest, extending wider and further beyond the political futures of Starmer and the class of '24. Fundamentally, herein lies an account concerning what degree of influence you and I get in the governance of our own country. This should should worry everyone.

Firstly, to the Core Details

After the OBR released recently a portion of the projections it shared with Reeves while she wrote the budget, the surprise was immediate. Not merely has the OBR not done such a thing before (described as an "rare action"), its figures seemingly contradicted the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget was going to be, the OBR's own predictions were getting better.

Consider the government's so-called "iron-clad" rule, stating by 2030 day-to-day spending on hospitals, schools, and the rest must be wholly funded by taxes: at the end of October, the OBR calculated it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented that it caused breakfast TV to interrupt its regular schedule. Weeks before the real budget, the country was warned: taxes would rise, and the primary cause cited as pessimistic numbers provided by the OBR, specifically 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 broadcast rounds suggested over the weekend, this is basically what happened at the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves deceived us was her alibi, since those OBR forecasts did not compel her actions. She might have made other choices; she might have provided alternative explanations, including during the statement. Prior to last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it is powerlessness that jumps out in Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself as an apolitical figure at the mercy of forces outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any party would be standing here today, facing the choices that I face."

She did make decisions, only not one the Labour party wishes to publicize. Starting April 2029 UK workers as well as businesses are set to be contributing another £26bn annually in taxes – and the majority of this will not be spent on improved healthcare, new libraries, nor enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of this extra cash will instead provide Reeves cushion against her self-imposed budgetary constraints. Approximately 25% goes on paying for the government's own policy reversals. Reviewing the OBR's calculations and being as generous as possible to Reeves, only 17% of the taxes will fund genuinely additional spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always an act of theatrical cruelty from George Osborne. A Labour government could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform along with all of Blue Pravda have spent days barking about the idea that Reeves fits the caricature of left-wing finance ministers, taxing strivers to spend on the workshy. Labour backbenchers are applauding her budget for being a relief for their troubled consciences, protecting the most vulnerable. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and the others in the bond markets.

The government can make a compelling argument for itself. The margins from the OBR were deemed insufficient for comfort, especially given that bond investors demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan that carries way more debt. Combined with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget allows the Bank of England to reduce its key lending rate.

You can see that those wearing Labour badges may choose not to frame it in such terms next time they're on the doorstep. According to one independent adviser for Downing Street says, Reeves has effectively "weaponised" financial markets as an instrument of discipline against her own party and the voters. This is the reason the chancellor can't resign, regardless of which promises she breaks. It is also why Labour MPs will have to knuckle down and vote to take billions off social security, just as Starmer promised yesterday.

A Lack of Statecraft and an Unfulfilled Promise

What is absent from this is the notion of statecraft, of harnessing the finance ministry and the central bank to forge a new accommodation with investors. Also absent is innate understanding of voters,