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This charge carries significant weight: suggesting Rachel Reeves has deceived the British public, spooking them to accept billions in extra taxes which could be funneled into increased benefits. While exaggerated, this isn't usual Westminster bickering; on this occasion, the consequences are more serious. A week ago, critics of Reeves alongside Keir Starmer were labeling their budget "a shambles". Now, it is denounced as lies, with Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge demands straightforward answers, therefore here is my assessment. Has the chancellor been dishonest? On current evidence, no. There were no whoppers. But, notwithstanding Starmer's yesterday's remarks, that doesn't mean there is no issue here and we should move on. The Chancellor did mislead the public about the factors shaping her choices. Was this all to channel cash to "benefits street", as the Tories claim? Certainly not, and the numbers demonstrate it.

A Standing Sustains Another Blow, Yet Truth Must Win Out

Reeves has sustained another hit to her reputation, however, should facts still matter in politics, Badenoch ought to call off her attack dogs. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

But the real story is far stranger than the headlines suggest, and stretches wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is a story about how much say you and I get over the governance of our own country. And it concern everyone.

First, on to Brass Tacks

After the OBR released last Friday a portion of the forecasts it shared with Reeves as she wrote the budget, the surprise was instant. Not only had the OBR not acted this way before (an "exceptional move"), its figures seemingly contradicted the chancellor's words. Even as rumors from Westminster were about the grim nature of the budget would have to be, the OBR's own predictions were getting better.

Take the government's so-called "iron-clad" rule, stating by 2030 daily spending on hospitals, schools, and the rest must be completely funded by taxes: at the end of October, the OBR calculated it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves gave a press conference so unprecedented it forced breakfast TV to interrupt its regular schedule. Several weeks before the real budget, the nation was put on alert: taxes were going up, and the main reason being gloomy numbers provided by the OBR, specifically its finding that the UK had become less efficient, putting more in but yielding less.

And so! It came to pass. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested over the weekend, that is basically what transpired at the budget, that proved to be significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves deceived us concerned her justification, because these OBR forecasts did not force her hand. She could have chosen other choices; she could have given other reasons, even on budget day itself. Prior to last year's election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The strength of the vote. The possibility for national renewal."

One year later, and it's a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years casts herself to be a technocrat at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be in this position today, facing the choices that I face."

She certainly make a choice, only not the kind Labour wishes to publicize. Starting April 2029 UK workers as well as businesses will be contributing another £26bn a year in taxes – but most of that will not go towards spent on improved healthcare, public services, or enhanced wellbeing. Whatever bilge is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Money Actually Ends Up

Instead of being spent, over 50% of the extra cash will in fact give Reeves a buffer against her own budgetary constraints. About 25% goes on covering the government's own U-turns. Examining the OBR's calculations and being as generous as possible to Reeves, a mere 17% of the taxes will go on genuinely additional spending, for example abolishing the two-child cap on child benefit. Removing it "will cost" the Treasury only £2.5bn, because it had long been a bit of theatrical cruelty from George Osborne. A Labour government could and should abolished it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform along with the entire right-wing media have been railing against the idea that Reeves fits the stereotype of Labour chancellors, soaking strivers to fund the workshy. Labour backbenchers have been applauding her budget as a relief to their social concerns, safeguarding the disadvantaged. Both sides could be completely mistaken: Reeves's budget was primarily aimed at asset managers, hedge funds and the others in the financial markets.

Downing Street could present a strong case for itself. The margins from the OBR were too small to feel secure, especially given that lenders demand from the UK the highest interest rate among G7 rich countries – higher than France, that recently lost its leader, higher than Japan which has way more debt. Combined with the measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the central bank to reduce its key lending rate.

You can see that those wearing red rosettes may choose not to couch it this way next time they're on the doorstep. According to one independent adviser for Downing Street says, Reeves has "weaponised" financial markets as a tool of discipline over her own party and the electorate. This is the reason Reeves cannot resign, regardless of which promises she breaks. It is also why Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer indicated recently.

Missing Statecraft and a Broken Promise

What is absent here is any sense of statecraft, of harnessing the finance ministry and the Bank to forge a fresh understanding with investors. Also absent is any innate understanding of voters,