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This allegation is a serious one: that Rachel Reeves may have deceived Britons, spooking them into accepting billions in extra taxes that would be used for increased welfare payments. While hyperbolic, this is not typical political sparring; on this occasion, the consequences are higher. A week ago, detractors of Reeves alongside Keir Starmer had been labeling their budget "a shambles". Now, it's denounced as falsehoods, and Kemi Badenoch demanding the chancellor's resignation.

This grave accusation demands straightforward responses, so here is my assessment. Has the chancellor tell lies? On current evidence, no. She told no major untruths. But, notwithstanding Starmer's yesterday's remarks, that doesn't mean there is no issue here and we should move on. The Chancellor did misinform the public about the factors shaping her decisions. Was it to funnel cash towards "benefits street", as the Tories assert? Certainly not, and the figures demonstrate this.

A Reputation Sustains A Further Hit, Yet Truth Should Prevail

Reeves has taken another hit to her standing, however, if facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down recently of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

Yet the real story is much more unusual compared to the headlines indicate, extending broader and deeper than the political futures of Starmer and his class of '24. 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.

First, on to the Core Details

When the OBR released recently some of the forecasts it provided to Reeves while she wrote the budget, the shock was immediate. Not only had the OBR not done such a thing before (described as an "unusual step"), its figures apparently went against the chancellor's words. While leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were getting better.

Consider the Treasury's most "unbreakable" rule, that by 2030 daily spending on 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 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 would rise, and the primary cause being pessimistic numbers provided by the OBR, in particular its finding suggesting the UK was less productive, investing more but yielding less.

And so! It happened. Despite the implications from Telegraph editorials and Tory media appearances implied recently, this is essentially what transpired at the budget, which was big and painful and bleak.

The Deceptive Justification

The way in which Reeves deceived us concerned her justification, since those OBR forecasts didn't force her hand. She might have chosen other choices; she might have provided alternative explanations, even during the statement. Before the recent election, Starmer promised exactly such public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is a lack of agency that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself as an apolitical figure buffeted by factors outside her influence: "In the context of the long-term challenges on our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She certainly make decisions, just not the kind the Labour party cares to publicize. From April 2029 British workers and businesses will be contributing an additional £26bn annually in tax – and the majority of this will not be spent on better hospitals, public services, or happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Instead of going on services, more than 50% of this additional revenue will instead give Reeves a buffer against her self-imposed fiscal rules. Approximately 25% is allocated to covering the administration's policy reversals. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, a mere 17% of the taxes will go on actual new spending, such as abolishing the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been an act of political theatre from George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform along with all of right-wing media have spent days railing against the idea that Reeves fits the caricature of left-wing finance ministers, taxing hard workers to fund shirkers. Labour backbenchers have been cheering her budget for being balm for their troubled consciences, safeguarding the disadvantaged. Both sides could be completely mistaken: Reeves's budget was largely aimed at asset managers, hedge funds and the others in the financial markets.

Downing Street could present a strong case for itself. The forecasts from the OBR were insufficient to feel secure, particularly given that bond investors charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, which lost its leader, higher than Japan that carries far greater debt. Combined with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget allows the central bank to reduce its key lending rate.

You can see that those folk with Labour badges may choose not to frame it in such terms when they're on the doorstep. According to one independent adviser for Downing Street puts it, Reeves has effectively "weaponised" the bond market as an instrument of discipline over her own party and the voters. It's why Reeves can't resign, regardless of which pledges are broken. It is also the reason Labour MPs must knuckle down and support measures that cut billions from social security, as Starmer promised recently.

A Lack of Political Vision , a Broken Promise

What is absent here is the notion of statecraft, of harnessing the Treasury and the Bank to forge a new accommodation with markets. Missing too is any innate understanding of voters,