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This accusation represents a grave matter: that Rachel Reeves may have lied to Britons, frightening them into accepting billions in additional taxes which would be used for increased benefits. However exaggerated, this isn't usual political bickering; on this occasion, the stakes could be damaging. A week ago, detractors aimed at Reeves alongside Keir Starmer were labeling their budget "a mess". Today, it's branded as lies, with Kemi Badenoch demanding Reeves to step down.

Such a grave accusation requires straightforward answers, therefore here is my view. Has the chancellor lied? Based on the available evidence, apparently not. There were no whoppers. But, despite Starmer's yesterday's comments, it doesn't follow that there is no issue here and we can all move along. The Chancellor did mislead the public regarding the considerations shaping her choices. Was it to funnel cash towards "benefits street", like the Tories claim? Certainly not, as the numbers demonstrate this.

A Standing Takes Another Hit, But Facts Must Win Out

Reeves has taken a further blow to her reputation, but, if facts continue to have anything to do with politics, Badenoch ought to stand down her attack dogs. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

Yet the real story is much more unusual compared to the headlines suggest, and stretches broader and deeper than the political futures of Starmer and the class of '24. At its heart, this is a story concerning how much say you and I get in the running of our own country. And it concern everyone.

First, to the Core Details

After the OBR published last Friday some of the forecasts it shared with Reeves as she prepared the red book, the surprise was immediate. Not merely had the OBR not done such a thing before (an "rare action"), its figures seemingly went against the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

Take the government's most "iron-clad" rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest would be wholly funded by taxes: at the end of October, the OBR calculated this would just about be met, albeit by a minuscule margin.

A few days later, Reeves held a press conference so extraordinary it forced morning television to interrupt its regular schedule. Several weeks prior to the real budget, the country was warned: taxes would rise, with the main reason cited as pessimistic numbers from the OBR, specifically its finding suggesting the UK had become less efficient, investing more but getting less out.

And lo! It came to pass. Despite what Telegraph editorials and Tory media appearances suggested recently, that is basically what transpired during the budget, which was significant, harsh, and grim.

The Deceptive Alibi

Where Reeves deceived us was her justification, since those OBR forecasts did not force her hand. She could have made different options; she could have provided other reasons, including on budget day itself. Prior to the recent 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 is a lack of agency that is evident from Reeves's breakfast speech. The first Labour chancellor for a decade and a half portrays herself to be an apolitical figure at the mercy of forces outside her influence: "In the context of the persistent challenges with our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She certainly make decisions, just not the kind Labour wishes to publicize. From April 2029 UK workers and businesses will be contributing an additional £26bn annually in taxes – but the majority of this will not be spent on improved healthcare, new libraries, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Instead of being spent, over 50% of this additional revenue will in fact provide Reeves cushion for her own budgetary constraints. About 25% is allocated to covering the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible to Reeves, a mere 17% of the tax take will fund genuinely additional spending, for example abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always an act of political theatre from George Osborne. A Labour government should have have binned it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have spent days barking about how Reeves fits the caricature of left-wing finance ministers, soaking strivers to spend on shirkers. Party MPs are cheering her budget for being balm to 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 in its defence. The forecasts from the OBR were too small for comfort, particularly considering lenders charge the UK the highest interest rate of all G7 rich countries – higher than France, that recently lost its leader, higher than Japan which has way more debt. Combined with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget allows the Bank of England to reduce interest rates.

You can see that those folk with Labour badges might not couch it in such terms next time they're on #Labourdoorstep. According to a consultant for Downing Street puts it, Reeves has "weaponised" the bond market as an instrument of discipline over Labour MPs and the voters. It's why the chancellor cannot resign, no matter what promises are broken. It is also the reason Labour MPs must fall into line and support measures that cut billions from social security, just as Starmer indicated recently.

Missing Statecraft and an Unfulfilled Promise

What's missing from this is the notion of statecraft, of harnessing the finance ministry and the central bank to reach a new accommodation with investors. Also absent is any intuitive knowledge of voters,