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The accusation is a serious one: that Rachel Reeves may have deceived UK citizens, frightening them to accept massive additional taxes which would be used for higher benefits. While exaggerated, this is not typical Westminster bickering; on this occasion, the consequences could be damaging. Just last week, detractors aimed at Reeves alongside Keir Starmer were calling their budget "a mess". Today, it is branded as lies, and Kemi Badenoch calling for Reeves to step down.

Such a grave accusation requires clear responses, therefore here is my assessment. Has the chancellor lied? Based on current information, no. There were no major untruths. But, despite Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we should move on. Reeves did misinform the public regarding the factors informing her choices. Was it to channel cash towards "benefits street", as the Tories assert? No, and the numbers prove this.

A Reputation Takes Another Blow, But Facts Must Prevail

Reeves has taken a further hit to her reputation, however, should facts continue to matter in politics, Badenoch ought to call off her attack dogs. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench SW1's thirst for blood.

Yet the true narrative is far stranger compared to media reports indicate, extending wider and further beyond the political futures of Starmer and his 2024 intake. At its heart, this is an account about what degree of influence the public have over the governance of our own country. And it concern everyone.

First, on to Brass Tacks

When the OBR released recently a portion of the projections it shared with Reeves while she wrote the budget, the shock was immediate. Not only has the OBR not done such a thing before (described as an "rare action"), its figures seemingly contradicted Reeves's statements. While rumors from Westminster suggested the grim nature of the budget was going to be, the OBR's own forecasts were getting better.

Consider the Treasury's so-called "unbreakable" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be completely funded by taxes: at the end of October, the watchdog calculated it would just about be met, albeit by a tiny margin.

Several days later, Reeves held a media briefing so unprecedented it forced breakfast TV to break from its regular schedule. Weeks prior to the actual budget, the nation was warned: taxes were going up, with the primary cause cited as gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, putting more in but yielding less.

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

The Misleading Alibi

The way in which Reeves deceived us was her alibi, because these OBR forecasts didn't force her hand. She could have chosen other choices; she could have given other reasons, including during the statement. Prior to the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that jumps out from Reeves's breakfast speech. The first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by forces outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She certainly make a choice, just not one Labour cares to publicize. From April 2029 UK workers as well as businesses will be contributing another £26bn annually in tax – but most of that will not go towards funding better hospitals, new libraries, or enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of this extra cash will instead give Reeves a buffer against her own fiscal rules. Approximately 25% is allocated to paying for the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible to Reeves, only 17% of the taxes will fund genuinely additional spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it had long been a bit of political theatre by George Osborne. This administration should have have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform and all of Blue Pravda have been barking about how Reeves conforms to the stereotype of Labour chancellors, soaking strivers to spend on shirkers. Labour backbenchers are cheering her budget as a relief for their social concerns, protecting the most vulnerable. Both sides could be completely mistaken: Reeves's budget was largely targeted towards asset managers, hedge funds and participants within the financial markets.

The government could present a strong case for itself. The forecasts provided by the OBR were deemed too small for comfort, particularly given that lenders charge the UK the greatest borrowing cost among G7 developed nations – higher than France, that recently lost a prime minister, higher than Japan that carries far greater debt. Coupled with our policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget allows the central bank to reduce interest rates.

You can see that those folk with Labour badges might not frame it this way when they visit #Labourdoorstep. As one independent adviser to Downing Street puts it, Reeves has effectively "utilised" the bond market as a tool of control against Labour MPs and the voters. It's why the chancellor can't resign, no matter what pledges she breaks. It's the reason Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer indicated recently.

Missing Statecraft and an Unfulfilled Pledge

What's missing from this is the notion of statecraft, of mobilising the finance ministry and the Bank to reach a new accommodation with markets. Also absent is intuitive knowledge of voters,