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This charge carries significant weight: suggesting Rachel Reeves has misled Britons, scaring them to accept massive extra taxes which would be used for increased welfare payments. However hyperbolic, this isn't typical political sparring; this time, the consequences are higher. Just last week, detractors aimed at Reeves and Keir Starmer were calling their budget "a mess". Now, it's branded as lies, with Kemi Badenoch demanding Reeves to step down.

This serious charge requires clear responses, so let me provide my view. Has the chancellor lied? On current evidence, apparently not. There were no major untruths. However, notwithstanding Starmer's recent remarks, it doesn't follow that there is no issue here and we can all move along. The Chancellor did misinform the public about the considerations shaping her decisions. Was it to funnel cash towards "welfare recipients", as the Tories claim? Certainly not, and the figures prove it.

A Standing Takes A Further Hit, But Facts Must Win Out

The Chancellor has taken another hit to her reputation, but, if facts still matter in politics, Badenoch ought to stand down her attack dogs. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

Yet the true narrative is far stranger compared to the headlines suggest, and stretches wider and further beyond the careers of Starmer and his 2024 intake. At its heart, this is a story about what degree of influence the public get in the running of the nation. This should concern you.

First, on to the Core Details

After the OBR published last Friday a portion of the forecasts it shared with Reeves while she prepared the red book, the surprise was immediate. Not only has the OBR never done such a thing before (an "exceptional move"), its numbers apparently went against Reeves's statements. While leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Take the Treasury's most "unbreakable" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and other services would be wholly funded by taxes: in late October, the watchdog reckoned it would just about be met, albeit by a tiny margin.

Several days later, Reeves gave a press conference so extraordinary that it caused morning television to interrupt its usual fare. Several weeks before the actual budget, the nation was put on alert: taxes would rise, with the primary cause cited as gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK was less efficient, putting more in but getting less out.

And so! It happened. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested recently, that is essentially what transpired at the budget, which was big and painful and bleak.

The Misleading Alibi

Where Reeves misled us concerned her alibi, because these OBR forecasts did not compel her actions. She might have made different options; she could have given alternative explanations, including during the statement. Before the recent election, Starmer pledged exactly such people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, and it is a lack of agency that jumps out from Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself to be an apolitical figure at the mercy of factors outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any political stripe would be in this position today, facing the choices that I face."

She did make decisions, just not one Labour cares to publicize. From April 2029 British workers as well as businesses will be contributing another £26bn annually in tax – and the majority of this will not be spent on improved healthcare, public services, nor happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Rather than going on services, over 50% of the additional revenue will instead give Reeves cushion against her own fiscal rules. Approximately 25% goes on paying for the government's own U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the taxes will fund genuinely additional spending, such as abolishing the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always a bit of political theatre by George Osborne. This administration should have abolished it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform and the entire right-wing media have spent days railing against the idea that Reeves fits the stereotype of Labour chancellors, taxing hard workers to fund shirkers. Party MPs are cheering her budget for being a relief for their social concerns, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was largely aimed at asset managers, hedge funds and the others in the bond markets.

The government could present a strong case for itself. The forecasts from the OBR were insufficient to feel secure, particularly given that lenders charge the UK the highest interest rate among G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan which has far greater debt. Combined with the policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget enables the central bank to cut interest rates.

It's understandable that those wearing Labour badges may choose not to frame it this way next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has effectively "utilised" the bond market as a tool of discipline over her own party and the voters. This is the reason the chancellor can't resign, no matter what promises she breaks. It is also why Labour MPs will have to fall into line and support measures that cut billions from social security, as Starmer indicated recently.

Missing Statecraft , an Unfulfilled Pledge

What is absent here is any sense of statecraft, of mobilising the Treasury and the central bank to reach a fresh understanding with markets. Also absent is innate understanding of voters,