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This accusation represents a grave matter: suggesting Rachel Reeves has deceived Britons, spooking them into accepting massive extra taxes which could be funneled into higher benefits. However hyperbolic, this is not usual Westminster sparring; this time, the stakes are more serious. A week ago, detractors aimed at Reeves alongside Keir Starmer were calling their budget "uncoordinated". Now, it is branded as falsehoods, with Kemi Badenoch demanding the chancellor to quit.

Such a grave charge demands clear answers, therefore let me provide my assessment. Has the chancellor tell lies? Based on current evidence, apparently not. There were no major untruths. However, notwithstanding Starmer's recent comments, it doesn't follow that there's no issue here and we can all move along. The Chancellor did misinform the public about the considerations informing her choices. Was it to funnel cash to "welfare recipients", like the Tories claim? No, and the numbers demonstrate this.

A Standing Sustains Another Hit, But Facts Must Prevail

The Chancellor has sustained another blow to her reputation, but, if facts continue to have anything to do with politics, Badenoch ought to call off her lynch mob. Perhaps the stepping down yesterday of OBR head, Richard Hughes, due to the leak of its own documents will satisfy SW1's appetite for scandal.

Yet the true narrative is much more unusual than media reports suggest, and stretches broader and deeper than the political futures of Starmer and the class of '24. Fundamentally, this is an account about what degree of influence the public have over the running of our own country. And it should worry you.

Firstly, to the Core Details

When the OBR released recently a portion of the forecasts it shared with Reeves while she wrote the red book, the shock was immediate. Not merely had the OBR not done such a thing before (an "exceptional move"), its figures apparently contradicted Reeves's statements. While rumors from Westminster were about how bleak the budget would have to be, the OBR's own forecasts were improving.

Take the Treasury's most "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR reckoned it would barely be met, albeit by a minuscule margin.

A few days later, Reeves gave a press conference so extraordinary that it caused morning television to break from its usual fare. Several weeks prior to the actual budget, the nation was warned: taxes were going up, with the main reason cited as gloomy numbers from the OBR, in particular its finding that the UK had become less efficient, investing more but getting less out.

And lo! It came to pass. Despite what Telegraph editorials combined with Tory media appearances implied recently, that is basically what transpired during the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us was her justification, since those OBR forecasts did not force her hand. She might have made other choices; she could have given alternative explanations, including on budget day itself. Prior to last year's election, Starmer promised precisely this kind of public influence. "The hope of democracy. The strength of the vote. The potential for national renewal."

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

She certainly make decisions, only not one the Labour party cares to publicize. From April 2029 UK workers as well as businesses are set to be paying another £26bn annually in tax – but most of that will not be spent on better hospitals, new libraries, nor enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Rather than being spent, more than 50% of this extra cash will instead give Reeves a buffer for her own fiscal rules. About 25% is allocated to covering the administration's policy reversals. Examining the watchdog's figures and being as generous as possible to Reeves, only 17% of the taxes will fund actual new spending, for example abolishing the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it had long been an act of theatrical cruelty from George Osborne. A Labour government should have have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform and all of Blue Pravda have spent days barking about the idea that Reeves conforms to the caricature of Labour chancellors, taxing hard workers to fund the workshy. Party MPs have been cheering her budget for being a relief for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was primarily aimed at investment funds, speculative capital and the others in the financial markets.

Downing Street can make a compelling argument for itself. The forecasts from the OBR were too small for comfort, especially considering lenders charge the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the central bank to reduce interest rates.

It's understandable that those folk with red rosettes might not couch it this way when they're on the doorstep. According to one independent adviser for Downing Street puts it, Reeves has "utilised" the bond market to act as an instrument of control against Labour MPs and the electorate. This is why Reeves can't resign, no matter what promises she breaks. It is also why Labour MPs must fall into line and vote that cut billions from social security, just as Starmer promised recently.

A Lack of Political Vision and an Unfulfilled Pledge

What's missing from this is any sense of statecraft, of mobilising the Treasury and the central bank to reach a new accommodation with investors. Also absent is any intuitive knowledge of voters,