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This allegation carries significant weight: that Rachel Reeves has deceived the British public, scaring them to accept billions in extra taxes that could be used for increased welfare payments. However hyperbolic, this isn't usual political bickering; on this occasion, the stakes could be damaging. A week ago, detractors of Reeves alongside Keir Starmer had been calling their budget "a mess". Today, it is denounced as lies, and Kemi Badenoch calling for the chancellor to quit.

This grave charge requires straightforward responses, so let me provide my view. Did the chancellor tell lies? Based on the available evidence, apparently not. She told no major untruths. However, notwithstanding Starmer's recent remarks, that doesn't mean there's nothing to see and we can all move along. Reeves did misinform the public regarding the factors shaping her choices. Was it to funnel cash to "welfare recipients", like the Tories claim? Certainly not, as the figures prove this.

A Standing Sustains Another Blow, Yet Truth Must Prevail

The Chancellor has sustained another hit to her standing, however, should facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the resignation recently of OBR head, Richard Hughes, over the leak of its own documents will satisfy SW1's thirst for blood.

Yet the real story is far stranger than the headlines suggest, extending broader and deeper than the careers of Starmer and his 2024 intake. Fundamentally, this is an account about what degree of influence you and I have over the running of the nation. And it concern everyone.

First, to the Core Details

After the OBR released last Friday a portion of the projections it provided to Reeves as she prepared the red book, the surprise was instant. Not merely has the OBR never done such a thing before (described as an "exceptional move"), its figures seemingly went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

Take the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest would be wholly funded by taxes: at the end of October, the OBR calculated it would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so unprecedented it forced morning television to break from its usual fare. Weeks prior to the actual budget, the nation was put on alert: taxes would rise, and the main reason being pessimistic numbers provided by the OBR, specifically its conclusion suggesting the UK had become less efficient, putting more in but getting less out.

And lo! It happened. Despite what Telegraph editorials and Tory broadcast rounds implied over the weekend, that is essentially what transpired at the budget, that proved to be significant, harsh, and grim.

The Deceptive Justification

Where Reeves misled us was her alibi, since these OBR forecasts did not force her hand. She could have chosen other choices; she could have given other reasons, including on budget day itself. Before last year's election, Starmer promised precisely this kind of people power. "The hope of democracy. The power of the vote. The potential for national renewal."

A year on, and it's powerlessness that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be a technocrat at the mercy of factors beyond her control: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She certainly make a choice, just not the kind Labour wishes to publicize. Starting April 2029 UK workers as well as businesses will be paying another £26bn a year in taxes – and most of that will not be spent on improved healthcare, new libraries, nor happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "benefits street".

Where the Money Really Goes

Instead of going on services, over 50% of this additional revenue will in fact give Reeves a buffer for her self-imposed fiscal rules. Approximately 25% is allocated to covering the administration's U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the tax take will fund actual new spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it was always an act of political theatre from George Osborne. This administration should have abolished it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform and all of right-wing media have spent days barking about the idea that Reeves conforms to the stereotype of left-wing finance ministers, taxing strivers to fund shirkers. Labour backbenchers have been applauding her budget as balm to their troubled consciences, safeguarding the disadvantaged. Each group could be completely mistaken: Reeves's budget was largely aimed at asset managers, speculative capital and the others in the bond markets.

Downing Street could present a strong case in its defence. The forecasts provided by the OBR were deemed insufficient for comfort, particularly given that bond investors charge the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, which lost a prime minister, and exceeding Japan which has far greater debt. Coupled with our policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan enables the Bank of England to reduce its key lending rate.

It's understandable why those wearing red rosettes might not couch it this way next time they're on the doorstep. According to a consultant to Downing Street says, Reeves has "utilised" financial markets to act as a tool of discipline against Labour MPs and the voters. It's the reason Reeves can't resign, regardless of which pledges she breaks. It is also why Labour MPs must knuckle down and support measures to take billions off social security, just as Starmer promised recently.

Missing Political Vision and a Broken Pledge

What's missing from this is the notion of statecraft, of mobilising the Treasury and the Bank to forge a fresh understanding with investors. Also absent is any intuitive knowledge of voters,