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This charge is a serious one: that Rachel Reeves has lied to Britons, spooking them to accept billions in additional taxes that could be spent on higher welfare payments. While hyperbolic, this isn't typical political bickering; this time, the stakes could be damaging. A week ago, critics aimed at Reeves and Keir Starmer were labeling their budget "a mess". Now, it is denounced as falsehoods, with Kemi Badenoch demanding the chancellor's resignation.

This grave accusation demands straightforward answers, therefore here is my assessment. Did the chancellor tell lies? On the available evidence, no. There were no blatant falsehoods. However, notwithstanding Starmer's recent comments, 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 it to channel cash towards "welfare recipients", like the Tories claim? Certainly not, and the figures demonstrate this.

A Reputation Takes A Further Blow, Yet Truth Should Win Out

Reeves has sustained another blow to her standing, but, if facts continue to have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the stepping down recently of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

Yet the real story is far stranger compared to the headlines suggest, extending broader and deeper beyond the careers of Starmer and his class of '24. At its heart, this is a story concerning what degree of influence you and I get over the running of our own country. And it concern everyone.

First, on to Brass Tacks

After the OBR released last Friday some of the forecasts it provided to Reeves as she wrote the budget, the surprise was immediate. Not merely has the OBR not done such a thing before (described as an "exceptional move"), its numbers apparently went against the chancellor's words. Even as rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were getting better.

Consider the Treasury's so-called "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services would be wholly funded by taxes: at the end of October, the OBR reckoned this would barely be met, albeit only by a tiny margin.

Several days later, Reeves held a media briefing so extraordinary that it caused morning television to break from its regular schedule. Several weeks prior to the actual budget, the country was put on alert: taxes were going up, with the main reason cited as pessimistic numbers from the OBR, specifically its finding that the UK was less efficient, putting more in but getting less out.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances suggested over the weekend, this is basically what happened during the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves deceived us concerned her justification, since these OBR forecasts didn't compel her actions. She could have made other choices; she could have provided other reasons, including on budget day itself. Before the recent election, Starmer promised precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it is powerlessness that is evident in Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be an apolitical figure buffeted by forces outside her influence: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any party would be standing here today, facing the decisions that I face."

She did make a choice, just not one Labour wishes to broadcast. From April 2029 British workers as well as businesses are set to be contributing another £26bn annually in tax – but the majority of this will not be funding better hospitals, public services, nor happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Instead of going on services, over 50% of this extra cash will instead provide Reeves cushion for her own fiscal rules. About 25% is allocated to covering the government's own U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt to Reeves, a mere 17% of the taxes will fund actual new spending, for example scrapping the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty from George Osborne. A Labour government could and should abolished it immediately upon taking office.

The True Audience: The Bond Markets

Conservatives, Reform along with all of Blue Pravda have been railing against the idea that Reeves fits the caricature of left-wing finance ministers, taxing hard workers to spend on the workshy. Party MPs have been applauding her budget as balm to their troubled consciences, safeguarding the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, hedge funds and the others in the financial markets.

The government could present a strong case in its defence. The forecasts provided by the OBR were too small for comfort, particularly considering bond investors demand from the UK the greatest borrowing cost of all G7 rich countries – higher than France, that recently lost its leader, higher than Japan which has way more debt. Combined with the policies to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan enables the central bank to reduce its key lending rate.

You can see why those folk with Labour badges may choose not to frame it this way next time they're on the doorstep. According to a consultant to Downing Street puts it, Reeves has "weaponised" the bond market as an instrument of control over her own party and the voters. It's why Reeves cannot resign, no matter what pledges she breaks. It is also the reason Labour MPs must fall into line and support measures that cut billions from social security, as Starmer indicated recently.

A Lack of Political Vision , an Unfulfilled Pledge

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