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This allegation 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 higher welfare payments. While exaggerated, this isn't usual political bickering; on this occasion, the consequences could be damaging. A week ago, critics aimed at Reeves and Keir Starmer had been labeling their budget "a mess". Today, it's denounced as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

This grave charge demands straightforward responses, therefore let me provide my assessment. Did the chancellor been dishonest? Based on current evidence, no. There were no whoppers. But, notwithstanding Starmer's recent comments, it doesn't follow that there's nothing to see and we can all move along. The Chancellor did mislead the public about the considerations informing her decisions. Was it to channel cash towards "benefits street", like the Tories assert? Certainly not, as the numbers prove this.

A Standing Sustains Another Hit, But Facts Must Prevail

The Chancellor has sustained another blow to her reputation, but, if facts still matter in politics, Badenoch should stand down her attack dogs. Maybe 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 SW1's thirst for blood.

But the true narrative is much more unusual than the headlines suggest, extending wider and further than the careers of Starmer and his class of '24. At its heart, herein lies a story about what degree of influence the public get in the governance of the nation. And it concern everyone.

Firstly, on to the Core Details

After the OBR published recently a portion of the forecasts it provided to Reeves as she wrote the budget, the surprise was immediate. Not merely has the OBR never done such a thing before (described as an "unusual step"), its figures apparently contradicted the chancellor's words. While leaks from Westminster suggested the grim nature of the budget was going to be, the OBR's own predictions were getting better.

Consider the government's most "iron-clad" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be wholly funded by taxes: in late October, the watchdog calculated it would barely be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so unprecedented it forced morning television to break from its regular schedule. Weeks prior to the real budget, the country was put on alert: taxes would rise, and the main reason cited as pessimistic numbers provided by the OBR, in particular its finding that the UK was less productive, putting more in but getting less out.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory media appearances suggested recently, this is essentially what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Alibi

The way in which Reeves misled us was her justification, since these OBR forecasts didn't force her hand. She might have chosen other choices; she could have given other reasons, including during the statement. Prior to last year's election, Starmer promised exactly such public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, yet it's powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself to be a technocrat at the mercy of factors outside her influence: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any party would be in this position today, facing the choices that I face."

She did make a choice, just not the kind Labour cares to broadcast. Starting April 2029 British workers as well as businesses are set to be paying another £26bn annually in taxes – and most of that will not be spent on better hospitals, new libraries, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Money Really Goes

Instead of being spent, more than 50% of the extra cash will in fact give Reeves a buffer for her self-imposed fiscal rules. About 25% is allocated to covering the government's own U-turns. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the taxes will go on actual new spending, such as scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it was always an act of theatrical cruelty by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The True Audience: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have been barking about the idea that Reeves conforms to the caricature of Labour chancellors, taxing hard workers to spend on shirkers. Party MPs are cheering her budget as balm for their troubled consciences, safeguarding the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, hedge funds and the others in the bond markets.

Downing Street can make a compelling argument for itself. The forecasts from the OBR were too small to feel secure, particularly given that lenders demand from the UK the greatest borrowing cost among G7 rich countries – higher than France, that recently lost its leader, higher than Japan that carries way more debt. Coupled with our policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the Bank of England to reduce interest rates.

It's understandable why those folk with Labour badges might not frame it in such terms when they visit #Labourdoorstep. According to one independent adviser for Downing Street says, Reeves has effectively "utilised" the bond market to act as a tool of discipline against her own party and the electorate. This is the reason the chancellor can't resign, no matter what promises she breaks. It's the reason Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer promised yesterday.

Missing Political Vision and an Unfulfilled Pledge

What's missing from this is the notion of strategic governance, of harnessing the Treasury and the Bank to forge a new accommodation with markets. Also absent is any innate understanding of voters,