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The accusation carries significant weight: that Rachel Reeves may have deceived the British public, scaring them into accepting massive additional taxes that could be funneled into higher benefits. While exaggerated, this is not typical Westminster sparring; this time, the consequences are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer were calling their budget "uncoordinated". Today, it is branded as lies, with Kemi Badenoch calling for the chancellor to quit.

Such a serious accusation demands clear responses, so here is my assessment. Has the chancellor tell lies? On current evidence, apparently not. She told no blatant falsehoods. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we can all move along. The Chancellor did misinform the public regarding the considerations shaping her choices. Was it to channel cash to "welfare recipients", as the Tories assert? Certainly not, and the numbers demonstrate this.

A Reputation Takes Another Blow, But Facts Should Prevail

The Chancellor has taken another hit to her reputation, however, should facts still have anything to do with politics, Badenoch ought to stand down her lynch mob. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the true narrative is far stranger than the headlines suggest, extending wider and further beyond the careers of Starmer and the 2024 intake. At its heart, this is a story about what degree of influence the public have in the running of the nation. And it concern you.

Firstly, to Brass Tacks

After the OBR published last Friday a portion of the forecasts it provided to Reeves while she wrote the red book, the shock was immediate. Not only has the OBR never acted this way before (an "exceptional move"), its figures apparently went against the chancellor's words. While leaks from Westminster were about how bleak the budget was going to be, the watchdog's predictions were getting better.

Take the Treasury's so-called "iron-clad" fiscal rule, stating by 2030 daily spending for hospitals, schools, and other services would be wholly paid for by taxes: at the end of October, the watchdog calculated it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves gave a media briefing so unprecedented it forced morning television to interrupt its usual fare. Several weeks prior to the real budget, the nation was put on alert: taxes were going up, and the primary cause cited as gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK was less productive, putting more in but getting less out.

And lo! It happened. Despite what Telegraph editorials and Tory media appearances suggested recently, this is basically what happened at the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves misled us was her alibi, since those OBR forecasts didn't compel her actions. She might have chosen other choices; she could have given alternative explanations, including during the statement. Prior to 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's a lack of agency that is evident from Reeves's breakfast speech. The first Labour chancellor for a decade and a half portrays herself as a technocrat buffeted by forces beyond her control: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She certainly make a choice, just not one Labour cares to publicize. From April 2029 British workers as well as businesses are set to be paying an additional £26bn annually in taxes – and the majority of this will not be spent on better hospitals, public services, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, more than 50% of this extra cash will in fact give Reeves a buffer for her own fiscal rules. Approximately 25% is allocated to covering the government's own U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to Reeves, a mere 17% of the tax take will fund actual new spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been a bit of political theatre by George Osborne. This administration should have abolished it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have been railing against the idea that Reeves fits the caricature of left-wing finance ministers, taxing strivers to spend on shirkers. Party MPs have been applauding her budget as a relief for their social concerns, safeguarding the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was largely targeted towards asset managers, speculative capital and the others in the bond markets.

Downing Street could present a strong case in its defence. The margins provided by the OBR were deemed insufficient for comfort, particularly considering bond investors charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, which lost a prime minister, and exceeding Japan that carries far greater debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the Bank of England to cut interest rates.

You can see that those wearing red rosettes might not frame it this way next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has effectively "utilised" financial markets as an instrument of discipline over her own party and the electorate. This is the reason the chancellor can't resign, no matter what promises are broken. It is also why Labour MPs will have to knuckle down and support measures that cut billions from social security, as Starmer indicated yesterday.

A Lack of Statecraft and a Broken Promise

What's missing from this is the notion of statecraft, of mobilising the finance ministry and the central bank to reach a fresh understanding with markets. Missing too is any innate understanding of voters,