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The allegation carries significant weight: suggesting Rachel Reeves has lied to UK citizens, frightening them into accepting billions in additional taxes which could be used for higher benefits. While hyperbolic, this is not usual Westminster sparring; on this occasion, the stakes are higher. Just last week, detractors aimed at Reeves alongside Keir Starmer were labeling their budget "a shambles". Today, it is denounced as falsehoods, with Kemi Badenoch demanding Reeves to step down.

This grave charge requires straightforward responses, so let me provide my view. Did the chancellor tell lies? On the available information, no. She told no major untruths. But, despite Starmer's recent remarks, that doesn't mean there is nothing to see and we should move on. The Chancellor did mislead the public regarding the considerations informing her decisions. Was this all to channel cash to "benefits street", as the Tories claim? No, and the numbers demonstrate this.

A Reputation Sustains A Further Blow, But Facts Must Win Out

The Chancellor has sustained another hit to her reputation, however, should facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench SW1's appetite for scandal.

But the true narrative is far stranger than the headlines suggest, extending wider and further than the political futures of Starmer and the 2024 intake. At its heart, this is an account concerning how much say you and I have over the governance of our own country. This should concern everyone.

Firstly, on to Brass Tacks

After the OBR published recently a portion of the forecasts it shared with Reeves while she wrote the red book, the shock was immediate. Not merely had the OBR not done such a thing before (an "unusual step"), its figures seemingly contradicted the chancellor's words. While leaks from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were improving.

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

A few days later, Reeves gave a press conference so extraordinary that it caused morning television to break from its regular schedule. Weeks prior to the actual budget, the country was put on alert: taxes were going up, and the primary cause being gloomy numbers provided by the OBR, specifically its conclusion suggesting the UK was less productive, putting more in but yielding less.

And so! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, this is essentially what transpired during the budget, that proved to be big and painful and bleak.

The Deceptive Justification

The way in which Reeves deceived us was her justification, since those OBR forecasts didn't force her hand. She might have chosen different options; she could have provided other reasons, including on budget day itself. Before the recent election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The strength of the vote. The possibility for national renewal."

A year on, and it's powerlessness that is evident in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself as a technocrat at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any party would be standing here today, facing the choices that I face."

She did make decisions, only not the kind Labour cares to publicize. From April 2029 UK workers as well as businesses will be paying an additional £26bn annually in taxes – but the majority of this will not go towards funding better hospitals, new libraries, nor enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Really Goes

Rather than going on services, more than 50% of the additional revenue will instead provide Reeves a buffer for her own fiscal rules. About 25% is allocated to covering the administration's U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt towards Reeves, only 17% of the taxes will go on actual new spending, for example abolishing the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always a bit of political theatre from George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform along with the entire Blue Pravda have been railing against how Reeves conforms to the caricature of Labour chancellors, soaking hard workers to spend on shirkers. Labour backbenchers are applauding her budget for being balm for their social concerns, protecting the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and participants within the financial markets.

Downing Street could present a compelling argument for itself. The forecasts from the OBR were deemed too small for comfort, particularly given that lenders demand from the UK the highest interest rate of all G7 rich countries – higher than France, which lost a prime minister, and exceeding Japan that carries way more debt. Coupled with our policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget allows the Bank of England to cut interest rates.

You can see why those folk with red rosettes may choose not to couch it this way when they visit #Labourdoorstep. According to a consultant to Downing Street says, Reeves has "utilised" the bond market to act as an instrument of discipline over Labour MPs and the electorate. It's why Reeves can't resign, regardless of which pledges she breaks. It's the reason Labour MPs must fall into line and support measures to take billions off social security, as Starmer promised yesterday.

Missing Political Vision and an Unfulfilled Promise

What is absent here is the notion of strategic governance, of harnessing the finance ministry and the Bank to reach a new accommodation with investors. Also absent is intuitive knowledge of voters,