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This charge is a serious one: suggesting Rachel Reeves may have lied to UK citizens, frightening them into accepting massive additional taxes which could be spent on increased welfare payments. However hyperbolic, this isn't usual political sparring; this time, the consequences could be damaging. Just last week, critics of Reeves alongside Keir Starmer were labeling their budget "a mess". Now, it's denounced as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

This grave charge demands clear responses, so let me provide my assessment. Did the chancellor lied? On the available information, no. She told no blatant falsehoods. However, notwithstanding Starmer's recent remarks, that doesn't mean there's no issue here and we should move on. Reeves did mislead the public regarding the factors shaping her decisions. Was it to funnel cash towards "welfare recipients", like the Tories claim? No, as the numbers prove this.

A Reputation Sustains Another Blow, But Facts Must Prevail

The Chancellor has sustained another blow to her reputation, however, should facts still matter in politics, Badenoch ought to call off her attack dogs. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

Yet the real story is much more unusual than the headlines suggest, and stretches broader and deeper beyond the political futures of Starmer and the class of '24. At its heart, herein lies an account about how much say you and I get over the running of the nation. And it should worry everyone.

First, on to the Core Details

After the OBR published last Friday a portion of the forecasts it shared with Reeves while she wrote the red book, the surprise was instant. Not only had the OBR never done such a thing before (described as an "rare action"), its numbers apparently contradicted the chancellor's words. Even as rumors from Westminster were about how bleak the budget would have to be, the OBR's own forecasts were improving.

Consider the Treasury's so-called "unbreakable" rule, that by 2030 day-to-day spending for hospitals, schools, and other services must be completely paid for by taxes: in late October, the OBR calculated it would barely be met, albeit by a tiny margin.

A few days later, Reeves gave a press conference so unprecedented it forced morning television to break from its usual fare. Weeks before the real budget, the nation was put on alert: taxes would rise, with the main reason cited as pessimistic numbers from the OBR, in particular its conclusion suggesting the UK was less productive, putting more in but yielding less.

And lo! It happened. Notwithstanding what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is basically what happened during the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

Where Reeves deceived us concerned her alibi, since these OBR forecasts did not force her hand. She might have made different options; she could have given other reasons, including on budget day itself. Before last year's election, Starmer pledged exactly such people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, and it's a lack of agency that is evident from Reeves's breakfast speech. The 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 long-term challenges on our productivity … any finance minister of any political stripe would be standing here today, facing the choices that I face."

She did make a choice, only not one the Labour party wishes to publicize. From April 2029 British workers and businesses will be paying another £26bn a year in taxes – but most of that will not go towards funding better hospitals, public services, nor happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Cash Really Goes

Rather than going on services, more than 50% of this extra cash will instead give Reeves cushion against her self-imposed fiscal rules. About 25% goes on paying for the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible towards Reeves, only 17% of the tax take will fund genuinely additional spending, such as abolishing the two-child cap on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, because it had long been an act of political theatre by George Osborne. This administration should have abolished it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and the entire Blue Pravda have spent days railing against the idea that Reeves conforms to the caricature of Labour chancellors, taxing strivers to spend on the workshy. Labour backbenchers are cheering her budget as a relief for their social concerns, safeguarding the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was largely targeted towards asset managers, speculative capital and participants within the financial markets.

Downing Street can make a strong case for itself. The margins from the OBR were insufficient to feel secure, especially given that bond investors 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 way more debt. Combined with our policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan allows the Bank of England to reduce interest rates.

You can see that those folk with red rosettes may choose not to couch it in such terms when they visit the doorstep. As one independent adviser to Downing Street puts it, Reeves has "utilised" the bond market as a tool of control against Labour MPs and the electorate. This is the reason Reeves can't resign, regardless of which promises are broken. It's the reason Labour MPs will have to fall into line and vote that cut billions from social security, just as Starmer promised recently.

Missing Political Vision , a Broken Promise

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