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This accusation carries significant weight: that Rachel Reeves may have misled Britons, frightening them into accepting billions in extra taxes which could be used for increased benefits. However hyperbolic, this isn't usual political bickering; on this occasion, the stakes could be damaging. A week ago, critics aimed at Reeves alongside Keir Starmer were calling their budget "uncoordinated". Today, it's branded as falsehoods, with Kemi Badenoch demanding Reeves to step down.

Such a grave accusation demands straightforward answers, so here is my assessment. Did the chancellor tell lies? Based on the available evidence, no. She told no major untruths. However, notwithstanding Starmer's recent comments, that doesn't mean there's nothing to see and we can all move along. The Chancellor did mislead the public regarding the factors shaping her choices. Was it to funnel cash towards "welfare recipients", as the Tories claim? No, and the figures prove it.

A Reputation Sustains Another Blow, Yet Truth Should Prevail

The Chancellor has taken a further hit to her standing, however, should facts continue to matter in politics, Badenoch ought to stand down her lynch mob. Perhaps the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's appetite for scandal.

Yet the true narrative is far stranger compared to media reports indicate, and stretches wider and further than the careers of Starmer and his class of '24. Fundamentally, this is a story about what degree of influence you and I have in the governance of our own country. This should should worry you.

Firstly, to Brass Tacks

When the OBR published recently a portion of the forecasts it shared with Reeves as she prepared the budget, the shock was instant. Not merely has the OBR never done such a thing before (an "exceptional move"), its figures seemingly went against Reeves's statements. Even as rumors from Westminster suggested how bleak the budget would have to be, the watchdog's predictions were improving.

Consider the government's so-called "iron-clad" fiscal rule, that by 2030 daily spending for hospitals, schools, and other services would be wholly paid for by taxes: in late October, the watchdog reckoned it would just about be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented that it caused breakfast TV to interrupt its usual fare. Weeks before the real budget, the nation was warned: taxes were going up, with the primary cause being gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK had become less efficient, investing more but getting less out.

And so! It happened. Despite the implications from Telegraph editorials and Tory broadcast rounds implied recently, this is essentially what transpired at the budget, which was big and painful and bleak.

The Misleading Alibi

Where Reeves deceived us concerned her alibi, because those OBR forecasts didn't compel her actions. She might have chosen other choices; she could have provided alternative explanations, even on budget day itself. Before last year's election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it's powerlessness that is evident in Reeves's pre-budget speech. The first Labour chancellor in 15 years casts herself as an apolitical figure at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She certainly make decisions, only not the kind Labour cares to publicize. Starting April 2029 British workers and businesses will be contributing another £26bn annually in taxes – but most of that will not go towards funding improved healthcare, new libraries, or enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Rather than going on services, over 50% of the extra cash will in fact give Reeves cushion for her own budgetary constraints. About 25% is allocated to covering the government's own U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt to Reeves, only 17% of the taxes will fund actual new spending, for example scrapping the limit on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it had long been an act of theatrical cruelty from George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have been railing against the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing hard workers to spend on shirkers. Party MPs have been cheering her budget for being balm for their social concerns, protecting the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was largely targeted towards investment funds, hedge funds and the others in the financial markets.

Downing Street could present a compelling argument for itself. The forecasts from the OBR were insufficient to feel secure, especially given that bond investors demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, which lost its leader, higher than Japan that carries far greater debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget enables the central bank to reduce its key lending rate.

It's understandable that those wearing red rosettes might not couch it this way when they visit the doorstep. According to a consultant to Downing Street says, Reeves has effectively "weaponised" financial markets to act as an instrument of control over Labour MPs and the voters. This is why Reeves can't resign, no matter what pledges are broken. It is also the reason Labour MPs will have to fall into line and vote to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft and a Broken Pledge

What's missing here is the notion of strategic governance, of mobilising the Treasury and the central bank to forge a fresh understanding with investors. Missing too is any intuitive knowledge of voters,