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The allegation is a serious one: suggesting Rachel Reeves has misled UK citizens, scaring them into accepting billions in additional taxes that could be spent on higher welfare payments. However hyperbolic, this isn't typical Westminster sparring; this time, the stakes could be damaging. A week ago, critics aimed at Reeves alongside Keir Starmer were labeling their budget "a mess". Now, it's branded as lies, and Kemi Badenoch demanding the chancellor's resignation.

This grave accusation requires clear responses, therefore let me provide my assessment. Has the chancellor been dishonest? On current evidence, no. There were no whoppers. But, despite Starmer's recent remarks, it doesn't follow that there's no issue here and we can all move along. Reeves did mislead the public about the considerations informing her decisions. Was this all to funnel cash to "welfare recipients", like the Tories assert? No, as the numbers demonstrate it.

A Standing Takes A Further Hit, But Facts Should Prevail

The Chancellor has sustained another hit to her reputation, however, should facts still matter in politics, Badenoch should call off her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its internal documents will quench Westminster's thirst for blood.

But the real story is far stranger compared to the headlines indicate, extending broader and deeper beyond the careers of Starmer and the class of '24. Fundamentally, herein lies an account about how much say the public get in the running of our own country. This should should worry everyone.

First, to the Core Details

After the OBR released last Friday a portion of the projections it shared with Reeves as she prepared the budget, the surprise was immediate. Not only had the OBR not acted this way before (described as an "exceptional move"), its numbers apparently contradicted Reeves's statements. Even as rumors from Westminster were about the grim nature of the budget was going to be, the OBR's own forecasts were improving.

Take the Treasury's most "unbreakable" fiscal rule, stating by 2030 daily spending on hospitals, schools, and the rest would be completely funded by taxes: in late October, the OBR calculated it would just about be met, albeit by a tiny margin.

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

And lo! It came to pass. Despite what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, this is essentially what transpired at the budget, which was big and painful and bleak.

The Deceptive Justification

Where Reeves misled us was her justification, since those OBR forecasts didn't force her hand. She might have chosen other choices; she might have provided other reasons, including on budget day itself. Before the recent election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that jumps out in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself as an apolitical figure buffeted by factors outside her influence: "In the context of the persistent challenges with our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She certainly make a choice, just not the kind Labour cares to publicize. From April 2029 British workers as well as businesses will be contributing an additional £26bn annually in taxes – but most of that will not be funding better hospitals, public services, or happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of this additional revenue will instead provide Reeves a buffer against her own fiscal rules. About 25% goes on covering the administration's policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the tax take will go on genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have spent days railing against the idea that Reeves fits the stereotype of left-wing finance ministers, soaking hard workers to fund the workshy. Party MPs have been applauding her budget as a relief for their troubled consciences, protecting the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was primarily targeted towards asset managers, speculative capital and the others in the financial markets.

The government can make a strong case for itself. The forecasts provided by the OBR were deemed insufficient to feel secure, particularly considering lenders demand from the UK the highest interest rate of all G7 developed nations – higher than France, which lost its leader, higher than Japan which has way more debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue this budget enables the central bank to cut interest rates.

It's understandable that those wearing red rosettes might not frame it this way when they visit the doorstep. According to a consultant to Downing Street says, Reeves has "utilised" the bond market to act as a tool of discipline against Labour MPs and the voters. This is the reason the chancellor can't resign, regardless of which promises are broken. It is also why Labour MPs will have to fall into line and vote to take billions off social security, as Starmer promised yesterday.

A Lack of Political Vision and a Broken Promise

What's missing here is the notion of statecraft, of harnessing the Treasury and the central bank to forge a new accommodation with investors. Also absent is any intuitive knowledge of voters,