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The charge carries significant weight: that Rachel Reeves may have misled the British public, scaring them to accept massive extra taxes that could be used for higher welfare payments. While exaggerated, this isn't typical Westminster sparring; on this occasion, the consequences are more serious. A week ago, detractors aimed at Reeves alongside Keir Starmer had been labeling their budget "a mess". Now, it's branded as lies, with Kemi Badenoch demanding the chancellor to quit.

This serious charge demands straightforward answers, so here is my assessment. Did the chancellor been dishonest? On current evidence, no. There were no whoppers. However, despite Starmer's yesterday's comments, that doesn't mean there is nothing to see and we should move on. Reeves did mislead the public regarding the considerations shaping her decisions. Was this all to channel cash towards "welfare recipients", like the Tories claim? Certainly not, and the numbers prove it.

A Standing Sustains A Further Hit, But Facts Should Prevail

Reeves has taken a further hit to her reputation, however, if facts still matter in politics, Badenoch ought to stand down her attack dogs. Maybe the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's appetite for scandal.

Yet the true narrative is much more unusual compared to the headlines suggest, and stretches wider and further than the political futures of Starmer and the 2024 intake. Fundamentally, herein lies a story about what degree of influence you and I have over the governance of our own country. And it concern everyone.

First, to the Core Details

After the OBR released recently a portion of the projections it provided to Reeves while she prepared the budget, the shock was instant. Not merely had the OBR never done such a thing before (described as an "exceptional move"), its numbers seemingly went against the chancellor's words. While leaks from Westminster were about the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

Consider the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the watchdog calculated it would just about 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 break from its usual fare. Several weeks prior to the actual budget, the nation was warned: taxes were going up, with the main reason cited as gloomy numbers provided by the OBR, specifically its finding suggesting the UK had become less productive, investing more but getting less out.

And so! It came to pass. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested over the weekend, this is basically what happened at the budget, which was big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us was her alibi, since those OBR forecasts didn't force her hand. She could have chosen different options; she might have given other reasons, including during the statement. Prior to last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it's powerlessness that is evident in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by factors beyond her control: "In the context of the persistent challenges on our productivity … any finance minister of any party would be in this position today, confronting the decisions that I face."

She did make a choice, just not the kind the Labour party cares to publicize. From April 2029 UK workers and businesses will be paying an additional £26bn annually in tax – and most of that will not go towards funding better hospitals, new libraries, nor happier lives. Whatever nonsense 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 the additional revenue will in fact give Reeves cushion against her self-imposed fiscal rules. About 25% goes on covering the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to a Labour chancellor, only 17% of the tax take will go on genuinely additional spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury a mere £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 Real Target: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have spent days railing against how Reeves conforms to the stereotype of Labour chancellors, soaking strivers to fund the workshy. Party MPs have been cheering her budget for being balm to their troubled consciences, safeguarding the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was largely targeted towards asset managers, hedge funds and participants within the bond markets.

The government could present a strong case in its defence. The forecasts provided by the OBR were deemed too small for comfort, particularly given that lenders charge the UK the greatest borrowing cost of all G7 rich countries – higher than France, which lost its leader, higher than Japan that carries way more debt. Coupled with the policies to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget allows the Bank of England to cut interest rates.

It's understandable that those wearing Labour badges might not frame it this way next time they visit #Labourdoorstep. As a consultant to Downing Street puts it, Reeves has effectively "utilised" the bond market as a tool of control over her own party and the voters. This is why the chancellor can't resign, regardless of which pledges she breaks. It is also why Labour MPs will have to fall into line and vote that cut billions from social security, as Starmer indicated yesterday.

A Lack of Political Vision and an Unfulfilled Pledge

What's missing from this is any sense of statecraft, of harnessing the Treasury and the Bank to reach a new accommodation with markets. Also absent is any intuitive knowledge of voters,