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The accusation represents a grave matter: suggesting Rachel Reeves may have deceived the British public, frightening them into accepting billions in extra taxes which would be used for higher welfare payments. However exaggerated, this isn't usual Westminster sparring; on this occasion, the stakes are higher. Just last week, critics of Reeves and Keir Starmer were labeling their budget "a mess". Now, it is branded as falsehoods, with Kemi Badenoch calling for Reeves to step down.

Such a grave accusation demands clear responses, so here is my assessment. Has the chancellor been dishonest? Based on current information, apparently not. She told no major untruths. But, notwithstanding Starmer's yesterday's remarks, that doesn't mean there's nothing to see and we can all move along. Reeves did misinform the public regarding the factors shaping her choices. Was it to funnel cash towards "welfare recipients", as the Tories assert? No, and the numbers prove it.

A Reputation Takes Another Blow, But Facts Should Win Out

The Chancellor has taken a further blow to her standing, but, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

But the real story is far stranger than media reports indicate, extending wider and further than the political futures of Starmer and his 2024 intake. Fundamentally, herein lies a story concerning what degree of influence you and I have in the running of our own country. This should concern everyone.

Firstly, to the Core Details

When the OBR released last Friday a portion of the forecasts it provided to Reeves as she wrote the red book, the surprise was instant. Not merely had the OBR never acted this way before (described as an "rare action"), its numbers apparently contradicted the chancellor's words. While leaks from Westminster suggested how bleak the budget was going to be, the OBR's own forecasts were improving.

Consider the government's most "unbreakable" rule, stating by 2030 daily spending on hospitals, schools, and other services must be completely paid for by taxes: in late October, the OBR calculated it would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a media briefing so extraordinary it forced morning television to interrupt its usual fare. Weeks before the actual budget, the nation was warned: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, in particular its conclusion suggesting the UK was less efficient, investing more but getting less out.

And so! It came to pass. Despite the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is essentially what happened at the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us concerned her alibi, since these OBR forecasts didn't force her hand. She could have made different options; she could have provided other reasons, including on budget day itself. Before last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, and it is a lack of agency that is evident from Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be an apolitical figure at the mercy of forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any party would be in this position today, facing the choices that I face."

She did make decisions, just not one the Labour party wishes to publicize. Starting April 2029 UK workers and businesses will be contributing another £26bn a year in taxes – and most of that will not be funding better hospitals, new libraries, nor enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Cash Really Goes

Rather than going on services, more than 50% of this additional revenue will instead provide Reeves a buffer against her own budgetary constraints. Approximately 25% goes on covering the government's own policy reversals. Examining the OBR's calculations and being as generous as possible to Reeves, a mere 17% of the taxes will fund actual new spending, for example abolishing the limit on child benefit. Removing it "will cost" 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 immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform along with all of right-wing media have spent days railing against how Reeves fits the caricature of Labour chancellors, soaking strivers to spend on the workshy. Labour backbenchers are applauding her budget as balm for their troubled consciences, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was primarily aimed at investment funds, speculative capital and the others in the financial markets.

Downing Street can make a strong case in its defence. The margins from the OBR were deemed insufficient for comfort, especially considering bond investors demand from the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, that recently lost a prime minister, and exceeding Japan which has way more debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget enables the Bank of England to cut interest rates.

You can see that those wearing red rosettes may choose not to frame it in such terms next time they're on #Labourdoorstep. According to one independent adviser to Downing Street says, Reeves has effectively "utilised" the bond market to act as an instrument of discipline against Labour MPs and the electorate. It's why the chancellor can't resign, no matter what pledges are broken. It is also the reason Labour MPs will have to knuckle down and vote that cut billions from social security, just as Starmer indicated recently.

Missing Statecraft , a Broken Promise

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