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This accusation represents a grave matter: that Rachel Reeves has deceived Britons, spooking them to accept massive additional taxes that would be funneled into higher benefits. However hyperbolic, this isn't typical Westminster sparring; on this occasion, the consequences are higher. A week ago, critics of Reeves alongside Keir Starmer had been calling their budget "a mess". Now, it is denounced as lies, with Kemi Badenoch calling for the chancellor's resignation.

This serious accusation demands straightforward responses, so here is my assessment. Did the chancellor lied? On the available evidence, apparently not. There were no whoppers. However, notwithstanding Starmer's yesterday's comments, it doesn't follow that there is nothing to see and we can all move along. The Chancellor did misinform the public about the factors informing her decisions. Was it to channel cash to "benefits street", as the Tories claim? No, as the numbers prove this.

A Reputation Sustains Another Hit, But Facts Should Prevail

Reeves has taken a further hit to her standing, but, if facts continue to matter in politics, Badenoch should call off her lynch mob. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will quench Westminster's appetite for scandal.

Yet the real story is far stranger compared to media reports suggest, and stretches wider and further than the careers of Starmer and the 2024 intake. Fundamentally, herein lies a story concerning how much say you and I get over the governance of our own country. And it should worry everyone.

Firstly, on to the Core Details

After the OBR released recently a portion of the projections it provided to Reeves as she prepared the budget, the shock was instant. Not merely had the OBR not acted this way before (an "exceptional move"), its figures seemingly contradicted the chancellor's words. While rumors from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Take the Treasury's most "iron-clad" rule, stating by 2030 day-to-day spending on hospitals, schools, and the rest must be completely funded by taxes: at the end of October, the OBR reckoned it would just about be met, albeit only by a tiny margin.

A few days later, Reeves gave a press conference so extraordinary it forced breakfast TV to interrupt its regular schedule. Several weeks before the real budget, the country was warned: taxes were going up, and the primary cause cited as pessimistic numbers from the OBR, in particular its conclusion suggesting the UK had become less efficient, putting more in but getting less out.

And so! It happened. Despite the implications from Telegraph editorials and Tory media appearances suggested over the weekend, that is basically what happened at the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us was her alibi, because those OBR forecasts did not compel her actions. She might have made other choices; she might have given alternative explanations, even on budget day itself. Before last year's election, Starmer pledged exactly such public influence. "The promise of democracy. The strength of the vote. The potential for national renewal."

One year later, and it is a lack of agency that is evident in Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be an apolitical figure at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any party would be in this position today, facing the choices that I face."

She did make a choice, only not the kind Labour cares to publicize. From April 2029 UK workers as well as businesses will be paying another £26bn annually in taxes – and most of that will not go towards funding better hospitals, public services, or enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of this extra cash will in fact provide Reeves cushion against her self-imposed budgetary constraints. Approximately 25% is allocated to paying for the government's own U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the tax take will fund actual new spending, such as scrapping the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, as it was always an act of political theatre by George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform and the entire right-wing media have been barking about how Reeves fits the caricature of Labour chancellors, taxing strivers to fund shirkers. Party MPs have been applauding her budget as balm for their troubled consciences, protecting the most vulnerable. Each group are 180-degrees wrong: Reeves's budget was primarily aimed at investment funds, speculative capital and participants within the financial 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 charge the UK the highest interest rate among G7 rich countries – exceeding that of France, which lost its leader, higher than Japan which has way more debt. Coupled with our measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget allows the central bank to reduce its key lending rate.

It's understandable why those folk with red rosettes might not couch it this way when they're on #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has effectively "utilised" the bond market to act as a tool of discipline over her own party and the electorate. This is the reason Reeves cannot resign, regardless of which pledges she breaks. It is also why Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft and a Broken Promise

What's missing from this is any sense of strategic governance, of mobilising the Treasury and the central bank to reach a new accommodation with investors. Missing too is intuitive knowledge of voters,