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The allegation carries significant weight: that Rachel Reeves has deceived UK citizens, spooking them into accepting massive extra taxes which could be spent on increased welfare payments. While exaggerated, this isn't typical political bickering; on this occasion, the stakes could be damaging. A week ago, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "a mess". Today, it is branded as lies, and Kemi Badenoch calling for the chancellor to quit.

Such a serious charge requires straightforward answers, so here is my assessment. Did the chancellor been dishonest? Based on current information, no. She told no blatant falsehoods. But, despite Starmer's recent comments, it doesn't follow that there is no issue here and we should move on. Reeves did mislead the public about the factors informing her choices. Was this all to funnel cash towards "benefits street", like the Tories assert? Certainly not, as the numbers prove this.

A Standing Takes Another Hit, Yet Truth Must Win Out

Reeves has sustained a further hit to her standing, but, should facts continue to matter in politics, Badenoch should call off her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

But the real story is far stranger compared to media reports suggest, extending wider and further beyond the careers of Starmer and his 2024 intake. Fundamentally, herein lies an account concerning how much say you and I get in the governance of the nation. And it concern everyone.

First, to Brass Tacks

When the OBR published last Friday a portion of the forecasts it provided to 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 contradicted the chancellor's words. Even as leaks from Westminster were about how bleak the budget would have to be, the OBR's own predictions were getting better.

Consider the Treasury's most "unbreakable" rule, stating by 2030 daily spending on hospitals, schools, and other services would be completely paid for by taxes: at the end of October, the watchdog reckoned this would just about be met, albeit by a minuscule margin.

A few days later, Reeves gave a media briefing so extraordinary it forced breakfast TV to break from its regular schedule. Several weeks before the real budget, the country was put on alert: taxes were going up, and the main reason being gloomy numbers provided by the OBR, specifically its conclusion that the UK had become less efficient, investing more but yielding less.

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

The Misleading Alibi

Where Reeves deceived us was her alibi, because these OBR forecasts didn't compel her actions. She could have chosen different options; she could have given alternative explanations, even on budget day itself. Before last year's election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it's powerlessness that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by forces beyond her control: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any party would be in this position today, facing the decisions that I face."

She certainly make a choice, just not one Labour cares to broadcast. From April 2029 UK workers as well as businesses will be paying an additional £26bn annually in taxes – and the majority of this will not be funding better hospitals, public services, or enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Cash Actually Ends Up

Instead of being spent, more than 50% of this extra cash will in fact give Reeves a buffer against her own budgetary constraints. About 25% is allocated to paying for the administration's policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, only 17% of the tax take will go on genuinely additional spending, for example scrapping the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it had long been an act of political theatre from George Osborne. This administration should have abolished it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform and all of right-wing media have spent days barking about the idea that Reeves conforms to the stereotype of Labour chancellors, soaking hard workers to spend on shirkers. Labour backbenchers have been cheering her budget as balm for their social concerns, protecting the disadvantaged. Both sides are completely mistaken: The Chancellor's budget was primarily targeted towards investment funds, speculative capital and the others in the financial markets.

The government can make a strong case in its defence. The margins provided by the OBR were deemed too small to feel secure, especially given that bond investors demand from the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, which lost its leader, higher than Japan which has way more debt. Coupled with the measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan allows the central bank to cut its key lending rate.

It's understandable that those folk with red rosettes might not frame it this way next time they're on #Labourdoorstep. As one independent adviser to Downing Street says, Reeves has effectively "weaponised" financial markets to act as an instrument of control over her own party and the voters. This is why the chancellor can't resign, no matter what promises she breaks. It's why Labour MPs must knuckle down and vote that cut billions from social security, as Starmer indicated yesterday.

A Lack of Statecraft , an Unfulfilled Pledge

What is absent from this is the notion of statecraft, of mobilising the Treasury and the Bank to forge a fresh understanding with markets. Also absent is any innate understanding of voters,