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The charge carries significant weight: suggesting Rachel Reeves may have lied to UK citizens, frightening them into accepting massive extra taxes which would be funneled into higher welfare payments. While hyperbolic, this is not typical political sparring; this time, the stakes are higher. Just last week, detractors of Reeves alongside Keir Starmer had been labeling their budget "uncoordinated". Today, it's denounced as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

Such a serious accusation requires straightforward answers, therefore let me provide my assessment. Has the chancellor been dishonest? On current evidence, no. There were no blatant falsehoods. However, despite Starmer's recent comments, that doesn't mean there is no issue here and we can all move along. The Chancellor did misinform the public regarding the considerations shaping her choices. Was this all to channel cash towards "welfare recipients", like the Tories assert? Certainly not, as the figures demonstrate it.

A Standing Takes Another Hit, But Facts Must Win Out

The Chancellor has sustained a further blow to her reputation, however, should facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of OBR head, Richard Hughes, due to the leak of its own documents will quench SW1's thirst for blood.

But the true narrative is far stranger than the headlines indicate, extending wider and further beyond the political futures of Starmer and his 2024 intake. Fundamentally, herein lies an account about what degree of influence you and I get over the governance of our own country. This should concern everyone.

First, on to Brass Tacks

After the OBR published last Friday a portion of the forecasts it provided to Reeves as she prepared the budget, the shock was immediate. Not merely has the OBR not done such a thing before (described as an "unusual step"), its numbers seemingly went against Reeves's statements. While rumors from Westminster suggested the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

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

A few days later, Reeves gave a media briefing so extraordinary it forced morning television to interrupt its usual fare. Several weeks prior to the real budget, the nation was put on alert: taxes would rise, and the main reason cited as pessimistic numbers provided by the OBR, in particular its conclusion that the UK was less efficient, putting more in but getting less out.

And lo! It came to pass. Despite the implications from Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is essentially what happened during the budget, which was significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us was her justification, because these OBR forecasts did not compel her actions. She could have made other choices; she might have given other reasons, including during the statement. Before last year's election, Starmer pledged precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it's a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years casts herself to be an apolitical figure at the mercy of forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, just not the kind the Labour party cares to broadcast. Starting April 2029 UK workers as well as businesses will be paying another £26bn a year in tax – and the majority of this will not go towards funding better hospitals, public services, nor happier lives. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Rather than going on services, more than 50% of the additional revenue will in fact give Reeves a buffer against her own budgetary constraints. Approximately 25% is allocated to paying for the administration's policy reversals. Examining the OBR's calculations and being as generous as possible towards a Labour chancellor, a mere 17% of the tax take will go on genuinely additional spending, such as abolishing the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it had long been an act of theatrical cruelty from George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with all of Blue Pravda have spent days railing against the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to spend on the workshy. Labour backbenchers are cheering her budget as a relief to their troubled consciences, protecting the disadvantaged. Each group could be 180-degrees wrong: 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 for itself. The margins from the OBR were deemed too small to feel secure, particularly given that lenders demand from the UK the highest interest rate among G7 rich countries – exceeding that of France, which lost its leader, and exceeding Japan that carries way more debt. Combined with our measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue their plan allows the Bank of England to reduce its key lending rate.

You can see why those folk with red rosettes might not frame it in such terms when they're on the doorstep. According to a consultant for Downing Street says, Reeves has "weaponised" the bond market as an instrument of discipline over Labour MPs and the electorate. This is the reason Reeves can't resign, regardless of which pledges she breaks. It's why Labour MPs will have to fall into line and support measures that cut billions from social security, as Starmer promised yesterday.

Missing Political Vision and a Broken Promise

What is absent here is the notion of statecraft, of mobilising the Treasury and the central bank to reach a new accommodation with investors. Also absent is intuitive knowledge of voters,