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This charge represents a grave matter: suggesting Rachel Reeves may have misled UK citizens, scaring them to accept massive extra taxes which could be spent on increased welfare payments. While hyperbolic, this isn't typical Westminster sparring; this time, the consequences are higher. A week ago, detractors of Reeves alongside Keir Starmer had been calling their budget "a mess". Today, it's branded as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

Such a grave charge demands clear responses, so here is my assessment. Has the chancellor been dishonest? On the available evidence, no. She told no blatant falsehoods. However, despite Starmer's recent remarks, it doesn't follow that there's nothing to see and we should move on. Reeves did mislead the public about the factors shaping her decisions. Was it to funnel cash towards "benefits street", like the Tories assert? Certainly not, as the figures demonstrate this.

A Reputation Sustains Another Hit, But Facts Should Prevail

Reeves has sustained another blow to her standing, but, if facts continue to have anything to do with politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of OBR head, Richard Hughes, due to the leak of its internal documents will quench SW1's appetite for scandal.

Yet the true narrative is much more unusual compared to the headlines indicate, extending wider and further beyond the political futures of Starmer and his 2024 intake. At its heart, this is a story about what degree of influence the public get in the running of the nation. This should concern everyone.

First, on to Brass Tacks

After the OBR published last Friday some of the forecasts it shared with Reeves while she prepared the red book, the surprise was instant. Not only has the OBR not done such a thing before (an "unusual step"), its numbers seemingly went against Reeves's statements. While leaks from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were improving.

Take the government's most "unbreakable" fiscal rule, stating by 2030 daily spending on hospitals, schools, and other services must be wholly funded by taxes: in late October, the OBR calculated this would just about be met, albeit only by a tiny margin.

Several days later, Reeves gave a press conference so unprecedented that it caused morning television to break from its usual fare. Several weeks prior to the actual budget, the country was put on alert: taxes were going up, with the primary cause being gloomy numbers provided by the OBR, specifically its finding suggesting the UK was less efficient, investing more but getting less out.

And so! It happened. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is essentially what transpired at the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us was her justification, because those OBR forecasts didn't force her hand. She might have made different options; she could have given other reasons, including on budget day itself. Prior to the recent election, Starmer pledged precisely this kind of people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, yet it's a lack of agency that jumps out in Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself as a technocrat buffeted by forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, just not the kind the Labour party cares to broadcast. Starting April 2029 British workers as well as businesses will be paying an additional £26bn a year in taxes – but most of that will not be funding improved healthcare, public services, nor happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Money Really Goes

Rather than going on services, more than 50% of the extra cash will instead provide Reeves a buffer against her self-imposed 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 a Labour chancellor, only 17% of the tax take will fund genuinely additional spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it was always a bit of theatrical cruelty by George Osborne. A Labour government could and should abolished it in its first 100 days.

The Real Target: The Bond Markets

Conservatives, Reform and all of Blue Pravda have spent days railing against how Reeves fits the caricature of left-wing finance ministers, taxing strivers to fund shirkers. Labour backbenchers have been cheering her budget for being a relief for their troubled consciences, protecting the most vulnerable. Each group are 180-degrees wrong: Reeves's budget was primarily targeted towards asset managers, hedge funds and participants within the bond markets.

The government could present a strong case in its defence. The margins provided by the OBR were deemed insufficient for comfort, particularly considering lenders charge the UK the highest interest rate among G7 rich countries – exceeding that of France, which lost its leader, and exceeding Japan which has way more debt. Coupled with the policies to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget enables the central bank to cut its key lending rate.

It's understandable that those folk with red rosettes might not frame it in such terms next time they're on #Labourdoorstep. As one independent adviser to Downing Street says, Reeves has effectively "weaponised" financial markets to act as a tool of discipline over Labour MPs and the voters. This is why the chancellor cannot resign, regardless of which pledges are broken. It is also why Labour MPs must fall into line and vote that cut billions from social security, as Starmer indicated recently.

Missing Political Vision and a Broken Pledge

What's missing from this is the notion of statecraft, of harnessing the finance ministry and the Bank to forge a new accommodation with investors. Also absent is any innate understanding of voters,