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This accusation carries significant weight: that Rachel Reeves has lied to the British public, spooking them to accept billions in extra taxes that could be funneled into increased welfare payments. However hyperbolic, this isn't usual Westminster sparring; on this occasion, the consequences are more serious. Just last week, critics of Reeves and Keir Starmer were calling their budget "a mess". Today, it is branded as falsehoods, with Kemi Badenoch demanding Reeves to step down.

Such a grave charge requires clear answers, therefore here is my view. Has the chancellor lied? Based on the available information, no. There were no whoppers. However, despite Starmer's recent comments, it doesn't follow that there is nothing to see and we should move on. The Chancellor did misinform the public about the considerations shaping her choices. Was it to funnel cash to "welfare recipients", like the Tories claim? Certainly not, and the numbers demonstrate it.

A Standing Sustains A Further Blow, But Facts Should Prevail

The Chancellor has taken a further blow to her reputation, but, should facts continue to matter in politics, Badenoch should call off her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will satisfy Westminster's appetite for scandal.

Yet the real story is far stranger compared to the headlines indicate, extending broader and deeper than the careers of Starmer and the class of '24. At its heart, herein lies an account concerning how much say the public have over the governance of the nation. And it should worry everyone.

First, to Brass Tacks

After the OBR published recently a portion of the forecasts it provided to Reeves while she wrote the budget, the shock was instant. Not only had the OBR never done such a thing before (described as an "rare action"), its figures seemingly contradicted the chancellor's words. Even as rumors from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were getting better.

Take the Treasury's so-called "unbreakable" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services would be completely paid for by taxes: at the end of October, the OBR calculated this would barely be met, albeit by a minuscule margin.

Several days later, Reeves held a media briefing so unprecedented that it caused breakfast TV to break from its usual fare. Several weeks before the real budget, the nation was warned: taxes were going up, and the main reason cited as pessimistic numbers provided by the OBR, specifically its finding that the UK was less productive, putting more in but getting less out.

And so! It happened. Despite what Telegraph editorials and Tory broadcast rounds implied over the weekend, that is basically what transpired during the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us concerned her alibi, because those OBR forecasts did not force her hand. She might have made different options; she might have given alternative explanations, even on budget day itself. Before the recent election, Starmer promised precisely this kind of people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it's a lack of agency that jumps out in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself to be an apolitical figure at the mercy of factors beyond her control: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any political stripe would be in this position today, confronting the choices that I face."

She did make decisions, only not the kind Labour cares to broadcast. From April 2029 British workers and businesses are set to be paying another £26bn annually in taxes – but most of that will not go towards funding better hospitals, new libraries, or happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of this extra cash will instead give Reeves a buffer against her own budgetary constraints. About 25% goes on covering the administration's policy reversals. Reviewing the OBR's calculations and being as generous as possible to a Labour chancellor, a mere 17% of the tax take will fund genuinely additional spending, such as abolishing the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, because it had long been a bit of theatrical cruelty from George Osborne. A Labour government should have have binned it immediately upon taking office.

The True Audience: The Bond Markets

Conservatives, Reform along with all of Blue Pravda have been barking about the idea that Reeves fits the stereotype of left-wing finance ministers, taxing strivers to spend on the workshy. Labour backbenchers have been applauding her budget as balm for their troubled consciences, safeguarding the most vulnerable. Both sides are 180-degrees wrong: Reeves's budget was largely targeted towards asset managers, speculative capital and the others in the financial markets.

The government could present a compelling argument in its defence. The margins provided by the OBR were deemed insufficient for comfort, particularly considering lenders demand from the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan which has far greater debt. Combined with our policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the Bank of England to reduce interest rates.

It's understandable why those wearing red rosettes may choose not to couch it in such terms when they visit #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has effectively "utilised" financial markets to act as an instrument of discipline over Labour MPs and the voters. It's the reason Reeves cannot resign, no matter what promises she breaks. It's why Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer promised yesterday.

A Lack of Political Vision and a Broken Promise

What's missing from this is any sense of statecraft, of harnessing the finance ministry and the Bank to reach a fresh understanding with investors. Missing too is intuitive knowledge of voters,