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The accusation is a serious one: suggesting Rachel Reeves may have lied to Britons, scaring them into accepting billions in additional taxes that would be funneled into higher welfare payments. While hyperbolic, this isn't typical political sparring; on this occasion, the consequences are higher. Just last week, critics aimed at Reeves and Keir Starmer were labeling their budget "a shambles". Now, it is branded as lies, with Kemi Badenoch demanding the chancellor to quit.

Such a grave charge demands clear responses, so let me provide my assessment. Did the chancellor lied? On current information, apparently not. There were no major untruths. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we should move on. The Chancellor did mislead the public about the factors shaping her decisions. Was this all to funnel cash towards "welfare recipients", like the Tories assert? No, and the figures demonstrate this.

A Standing Sustains Another Hit, Yet Truth Must Prevail

The Chancellor has taken another blow to her reputation, however, if facts still matter in politics, Badenoch should stand down her attack dogs. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its internal documents will quench Westminster's appetite for scandal.

But the true narrative is far stranger than media reports suggest, extending wider and further than the political futures of Starmer and the 2024 intake. Fundamentally, herein lies an account about what degree of influence the public get over the running of our own country. And it should worry you.

First, on to Brass Tacks

After the OBR published recently a portion of the forecasts it shared with Reeves while she wrote the red book, the surprise was instant. Not only had the OBR not acted this way before (described as an "rare action"), its numbers apparently contradicted Reeves's statements. While leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were improving.

Consider the Treasury's so-called "unbreakable" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest must be completely paid for 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 extraordinary that it caused morning television to interrupt its regular schedule. Weeks before the actual budget, the nation was warned: taxes would rise, with the main reason cited as gloomy numbers provided by the OBR, specifically its finding that the UK was less productive, putting more in but getting less out.

And lo! It happened. Despite what Telegraph editorials and Tory broadcast rounds suggested over the weekend, that is essentially what transpired during the budget, which was significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves misled us concerned her alibi, because those OBR forecasts did not force her hand. She might have made other choices; she might have given other reasons, even on budget day itself. Prior to the recent election, Starmer promised exactly such public influence. "The promise of democracy. The power of the vote. The potential for national renewal."

A year on, yet it is a lack of agency that is evident from Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be a technocrat buffeted by factors outside her influence: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any party would be standing here today, facing the choices that I face."

She did make a choice, just not the kind Labour wishes to broadcast. Starting April 2029 British workers as well as businesses are set to be contributing another £26bn annually in taxes – and most of that will not go towards funding improved healthcare, new libraries, nor happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, more than 50% of this additional revenue will instead provide Reeves a buffer for her own fiscal rules. Approximately 25% goes on covering the administration's U-turns. Examining the OBR's calculations and being as generous as possible towards Reeves, a mere 17% of the tax take will fund actual new spending, for example scrapping the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, because it had long been a bit of theatrical cruelty by George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform along with the entire right-wing media have been railing against how Reeves conforms to the caricature of Labour chancellors, taxing hard workers to spend on the workshy. Labour backbenchers are applauding her budget for being balm for their social concerns, protecting the disadvantaged. Both sides are completely mistaken: Reeves's budget was largely targeted towards asset managers, hedge funds and participants within the financial markets.

Downing Street can make a compelling argument for itself. The forecasts from the OBR were deemed too small to feel secure, particularly given that bond investors charge the UK the highest interest rate among G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan that carries way more debt. Coupled with our measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue this budget enables the central bank to reduce interest rates.

You can see why those folk with Labour badges may choose not to couch it this way next time they're on #Labourdoorstep. According to a consultant for Downing Street says, Reeves has effectively "weaponised" financial markets as a tool of control over her own party and the voters. This is the reason the chancellor cannot resign, no matter what pledges she breaks. It is also why Labour MPs must fall into line and vote that cut billions from social security, as Starmer indicated recently.

A Lack of Statecraft , an Unfulfilled Promise

What is absent from this is the notion of strategic governance, of harnessing the finance ministry and the Bank to reach a fresh understanding with investors. Also absent is intuitive knowledge of voters,