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This charge represents a grave matter: that Rachel Reeves has deceived Britons, frightening them to accept billions in additional taxes that could be used for higher welfare payments. While hyperbolic, this isn't usual political sparring; this time, the consequences are higher. A week ago, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "chaotic". Today, it's denounced as lies, and Kemi Badenoch demanding the chancellor's resignation.

This grave accusation demands clear responses, so here is my view. Has the chancellor lied? Based on current evidence, no. She told no major untruths. But, notwithstanding Starmer's recent remarks, that doesn't mean there is no issue here and we should move on. Reeves did mislead the public regarding the considerations shaping her decisions. Was this all to channel cash to "benefits street", as the Tories assert? Certainly not, as the figures prove it.

A Standing Sustains A Further Blow, Yet Truth Should Win Out

Reeves has taken a further blow to her standing, but, should facts still have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will satisfy SW1's thirst for blood.

Yet the true narrative is much more unusual than the headlines indicate, and stretches broader and deeper beyond the political futures of Starmer and his 2024 intake. Fundamentally, herein lies an account about what degree of influence the public get in the running of our own country. This should should worry everyone.

First, to Brass Tacks

After the OBR published recently a portion of the forecasts it provided to Reeves while she prepared the red book, the surprise was immediate. Not only had the OBR never acted this way before (an "unusual step"), its figures apparently contradicted the chancellor's words. While leaks from Westminster suggested how bleak the budget was going to be, the watchdog's predictions were getting better.

Take the government's so-called "unbreakable" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and the rest would be completely funded by taxes: in late October, the OBR calculated this would barely be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented that it caused morning television to break from its regular schedule. Several weeks before the actual budget, the nation was put on alert: taxes were going up, and the primary cause being pessimistic numbers provided by the OBR, specifically its conclusion suggesting the UK was less efficient, putting more in but getting less out.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, that is basically what transpired at the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us was her justification, because those OBR forecasts did not force her hand. She might have chosen different options; she might have provided other reasons, even on budget day itself. Before the recent election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, and it's a lack of agency that jumps out from Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself as a technocrat at the mercy of forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any party would be standing here today, confronting the choices that I face."

She did make decisions, only not the kind the Labour party cares to broadcast. From April 2029 UK workers and businesses will be contributing another £26bn annually in tax – and most of that will not go towards funding improved healthcare, public services, or happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Instead of going on services, over 50% of this additional revenue will in fact provide Reeves a buffer against her own budgetary constraints. Approximately 25% is allocated to covering the administration's U-turns. Reviewing the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the taxes will fund actual new spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always an act of theatrical cruelty from George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform and all of right-wing media have been railing against the idea that Reeves fits the stereotype of Labour chancellors, taxing strivers to fund the workshy. Party MPs have been applauding her budget as a relief for their troubled consciences, protecting the disadvantaged. Each group are completely mistaken: The Chancellor's budget was primarily aimed at investment funds, hedge funds and participants within the financial markets.

The government could present a compelling argument for itself. The margins from the OBR were deemed too small to feel secure, especially given that bond investors charge the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Combined with the policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the central bank to reduce interest rates.

You can see that those wearing Labour badges may choose not to couch it in such terms next time they're on #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has "utilised" the bond market to act as an instrument of control over her own party and the voters. It's the reason the chancellor cannot resign, no matter what pledges she breaks. It's why Labour MPs will have to knuckle down and support measures to take billions off social security, just as Starmer indicated yesterday.

Missing Political Vision and a Broken Pledge

What is absent here is any sense of statecraft, of mobilising the Treasury and the central bank to reach a fresh understanding with investors. Missing too is any intuitive knowledge of voters,