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The accusation carries significant weight: that Rachel Reeves has lied to UK citizens, spooking them to accept massive additional taxes that could be spent on increased welfare payments. While exaggerated, this isn't usual Westminster bickering; this time, the stakes are higher. A week ago, critics aimed at Reeves alongside Keir Starmer were calling their budget "uncoordinated". Now, it's branded as falsehoods, with Kemi Badenoch calling for Reeves to step down.

Such a serious accusation demands clear answers, so let me provide my view. Has the chancellor been dishonest? Based on current information, apparently not. There were no blatant falsehoods. But, notwithstanding Starmer's recent remarks, that doesn't mean there's nothing to see and we can all move along. Reeves did mislead the public about the considerations shaping her decisions. Was this all to channel cash to "welfare recipients", like the Tories assert? Certainly not, and the numbers prove it.

A Standing Sustains Another Hit, But Facts Should Win Out

Reeves has sustained another blow to her reputation, but, should facts still matter in politics, Badenoch ought to stand down her attack dogs. Perhaps the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its own documents will quench Westminster's thirst for blood.

But the real story is far stranger compared to media reports suggest, and stretches wider and further than the political futures of Starmer and his class of '24. At its heart, this is an account about what degree of influence you and I get over the governance of our own country. And it concern everyone.

Firstly, to Brass Tacks

After the OBR published last Friday a portion of the forecasts it provided to Reeves while she wrote the red book, the surprise was instant. Not only had the OBR never done such a thing before (an "rare action"), its figures seemingly contradicted the chancellor's words. While leaks from Westminster were about the grim nature of the budget was going to be, the watchdog's predictions were improving.

Consider the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest must be completely paid for by taxes: in late October, the watchdog calculated it would just about be met, albeit by a tiny margin.

Several days later, Reeves gave a press conference so unprecedented that it caused breakfast TV to interrupt its usual fare. Several weeks prior to the real budget, the country was put on alert: taxes were going up, and the primary cause being gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK was less productive, investing more but getting less out.

And so! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested recently, that is basically what transpired during the budget, which was big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us concerned her justification, because these OBR forecasts didn't compel her actions. She might have chosen other choices; she could have given alternative explanations, including during the statement. Prior to the recent election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it's powerlessness that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be a technocrat buffeted by forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be in this position today, confronting the choices that I face."

She certainly make a choice, just not one Labour cares to publicize. Starting April 2029 UK workers as well as businesses will be contributing an additional £26bn annually in taxes – and most of that will not be funding improved healthcare, public services, or happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of the extra cash will instead give Reeves cushion against her own budgetary constraints. Approximately 25% goes on paying for the administration's U-turns. Examining the watchdog's figures and being as generous as possible towards Reeves, only 17% of the tax take will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it had long been an act of theatrical cruelty from George Osborne. This administration could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform and all of Blue Pravda have spent days barking about how Reeves fits the caricature of Labour chancellors, taxing hard workers to fund the workshy. Party MPs have been cheering her budget for being balm to their social concerns, protecting the most vulnerable. Each group are completely mistaken: The Chancellor's budget was primarily aimed at investment funds, hedge funds and participants within the financial markets.

The government could present a strong case for itself. The margins provided by the OBR were too small for comfort, particularly considering bond investors charge the UK the highest interest rate among G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan which has way more debt. Combined with the policies to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan enables the central bank to reduce its key lending rate.

You can see why those wearing red rosettes may choose not to couch it in such terms when they're on #Labourdoorstep. As one independent adviser for Downing Street puts it, Reeves has "weaponised" financial markets as a tool of control over Labour MPs and the voters. It's why the chancellor can't resign, no matter what pledges she breaks. It's why Labour MPs must fall into line and support measures to take billions off social security, as Starmer promised yesterday.

Missing Political Vision , a Broken Pledge

What's missing from this is the notion of statecraft, of mobilising the finance ministry and the central bank to forge a new accommodation with investors. Missing too is any intuitive knowledge of voters,