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The charge represents a grave matter: that Rachel Reeves has lied to the British public, scaring them into accepting massive additional taxes which could be spent on higher welfare payments. While hyperbolic, this isn't typical Westminster sparring; this time, the consequences are higher. A week ago, critics aimed at Reeves and Keir Starmer had been calling their budget "disorderly". Now, it's denounced as falsehoods, and Kemi Badenoch calling for Reeves to step down.

This serious charge demands clear answers, so let me provide my view. Did the chancellor tell lies? On the available evidence, apparently not. She told no blatant falsehoods. However, despite Starmer's recent comments, it doesn't follow that there's nothing to see and we can all move along. The Chancellor did misinform the public regarding the factors informing her choices. Was it to funnel cash towards "benefits street", like the Tories assert? Certainly not, and the numbers prove it.

A Reputation Sustains A Further Blow, But Facts Must Prevail

The Chancellor has taken a further blow to her standing, but, should facts still have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will quench Westminster's appetite for scandal.

Yet the true narrative is much more unusual than media reports suggest, extending wider and further than the careers of Starmer and the 2024 intake. Fundamentally, this is a story concerning what degree of influence the public get over the governance of our own country. And it should worry everyone.

First, on to the Core Details

After the OBR released last Friday some of the forecasts it provided to Reeves as she wrote the red book, the shock was instant. Not merely has the OBR not acted this way before (described as an "exceptional move"), its figures seemingly went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were improving.

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

Several days later, Reeves gave a press conference so extraordinary it forced morning television to break from its regular schedule. Weeks before the actual budget, the nation was warned: taxes would rise, with the primary cause cited as gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, putting more in but yielding less.

And so! It came to pass. Despite what Telegraph editorials combined with Tory media appearances suggested over the weekend, this is basically what happened at the budget, that proved to be significant, harsh, and grim.

The Deceptive Alibi

Where Reeves deceived us concerned her justification, because those OBR forecasts did not compel her actions. She might have chosen different options; she might have given alternative explanations, even on budget day itself. Prior to the recent election, Starmer pledged exactly such public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that is evident from 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: "In the context of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She certainly make a choice, only not the kind Labour wishes to broadcast. Starting April 2029 British workers as well as businesses are set to be contributing another £26bn a year in tax – and most of that will not go towards spent on better hospitals, new libraries, or enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of going on services, more than 50% of this additional revenue will in fact provide Reeves cushion against her self-imposed fiscal rules. Approximately 25% goes on covering the government's own policy reversals. Examining the OBR's calculations and being as generous as possible towards a Labour chancellor, only 17% of the tax take will fund actual new spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always an act of theatrical cruelty by George Osborne. This administration could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have been railing against the idea that Reeves conforms to the caricature of Labour chancellors, taxing hard workers to fund shirkers. Labour backbenchers have been applauding her budget for being a relief for their troubled consciences, safeguarding the disadvantaged. Each group could be 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, speculative capital and participants within the bond markets.

The government could present a compelling argument for itself. The forecasts provided by the OBR were deemed too small to feel secure, especially considering lenders demand from the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, which lost its leader, and exceeding Japan which has far greater debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan enables the central bank to cut interest rates.

You can see that those folk with red rosettes might not couch it this way next time they're on #Labourdoorstep. As a consultant for Downing Street says, Reeves has "utilised" financial markets as an instrument of control against Labour MPs and the electorate. This is why the chancellor cannot resign, regardless of which pledges she breaks. It's the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer promised yesterday.

A Lack of Political Vision and an Unfulfilled Promise

What's missing from this is the notion of statecraft, of harnessing the Treasury and the central bank to reach a new accommodation with markets. Missing too is intuitive knowledge of voters,