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The accusation carries significant weight: suggesting Rachel Reeves may have deceived the British public, spooking them into accepting massive extra taxes which would be used for higher welfare payments. However hyperbolic, this isn't typical Westminster bickering; this time, the stakes could be damaging. A week ago, detractors aimed at Reeves alongside Keir Starmer had been calling their budget "uncoordinated". Today, it's denounced as lies, and Kemi Badenoch demanding the chancellor to quit.

Such a grave charge demands straightforward responses, therefore here is my assessment. Did the chancellor tell lies? On the available information, apparently not. There were no blatant falsehoods. However, despite Starmer's recent remarks, that doesn't mean there is no issue here and we can all move along. Reeves did mislead the public regarding the considerations shaping her decisions. Was this all to funnel cash towards "benefits street", like the Tories claim? Certainly not, as the figures prove it.

A Reputation Sustains A Further Hit, Yet Truth Must Prevail

The Chancellor has taken a further blow to her standing, but, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the stepping down recently of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's appetite for scandal.

Yet the true narrative is much more unusual than the headlines suggest, extending wider and further than the careers of Starmer and his 2024 intake. At its heart, herein lies an account about what degree of influence you and I get over the running of the nation. This should concern you.

First, on to Brass Tacks

After the OBR released recently some of the forecasts it provided to Reeves while she prepared the budget, the shock was immediate. Not merely had the OBR not done such a thing before (described as an "unusual step"), its figures seemingly contradicted Reeves's statements. Even as leaks from Westminster were about how bleak the budget would have to be, the OBR's own predictions were getting better.

Consider the Treasury's most "iron-clad" rule, that by 2030 daily spending for hospitals, schools, and the rest must be wholly funded by taxes: in late October, the OBR reckoned this would barely be met, albeit by a tiny margin.

Several days later, Reeves gave a media briefing so extraordinary it forced morning television to interrupt its usual fare. Weeks prior to the actual budget, the country was put on alert: taxes were going up, and the primary cause cited as gloomy numbers from the OBR, specifically its conclusion suggesting the UK was less efficient, putting more in but getting less out.

And lo! It came to pass. Despite what Telegraph editorials and Tory broadcast rounds suggested over the weekend, this is essentially what happened during the budget, which was significant, harsh, and grim.

The Deceptive Alibi

The way in which Reeves misled us was her alibi, because those OBR forecasts didn't compel her actions. She could have chosen other choices; she could have provided alternative explanations, including on budget day itself. Prior to the recent election, Starmer promised precisely this kind of public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it is a lack of agency 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 long-term 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, only not one Labour wishes to publicize. From April 2029 British workers as well as businesses will be paying an additional £26bn a year in tax – and most of that will not be spent on better hospitals, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of this extra cash will in fact give Reeves a buffer for her own fiscal rules. About 25% goes on covering the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the tax take will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been an act of political theatre from George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform along with the entire Blue Pravda have been railing against the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to spend on the workshy. Labour backbenchers have been applauding her budget as a relief for their social concerns, safeguarding the most vulnerable. Both sides could be completely mistaken: The Chancellor's budget was largely aimed at asset managers, speculative capital and participants within the bond markets.

Downing Street could present a strong case for itself. The forecasts from the OBR were too small to feel secure, especially considering lenders demand from the UK the highest interest rate of all G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the central bank to cut interest rates.

It's understandable why those wearing red rosettes might not frame it in such terms next time they visit #Labourdoorstep. As a consultant to Downing Street puts it, Reeves has "utilised" the bond market as a tool of discipline over Labour MPs and the electorate. It's why the chancellor can't resign, regardless of which pledges are broken. It is also the reason Labour MPs must knuckle down and support measures to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft and a Broken Promise

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