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This accusation is a serious one: that Rachel Reeves has deceived UK citizens, frightening them into accepting billions in extra taxes which would be funneled into increased welfare payments. While hyperbolic, this isn't usual political sparring; this time, the stakes could be damaging. Just last week, critics aimed at Reeves and Keir Starmer were labeling their budget "uncoordinated". Now, it's denounced as falsehoods, with Kemi Badenoch demanding the chancellor's resignation.

Such a serious charge requires straightforward answers, so here is my assessment. Did the chancellor tell lies? Based on current information, no. She told no blatant falsehoods. However, notwithstanding Starmer's recent comments, it doesn't follow that there is nothing to see and we can all move along. Reeves did mislead the public regarding the considerations informing her decisions. Was this all to channel cash to "welfare recipients", like the Tories assert? Certainly not, and the figures prove it.

A Reputation Sustains A Further Hit, Yet Truth Should Prevail

Reeves has taken a further blow to her standing, however, if facts still matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the true narrative is much more unusual compared to media reports suggest, extending broader and deeper beyond the careers of Starmer and his 2024 intake. At its heart, this is a story concerning what degree of influence the public have in the governance of the nation. And it should worry you.

First, to the Core Details

After the OBR released last Friday a portion of the projections it provided to Reeves as she wrote the red book, the shock was immediate. Not only has the OBR not done such a thing before (an "rare action"), its numbers seemingly went against Reeves's statements. While rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were improving.

Consider the government's most "unbreakable" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services would be completely funded by taxes: at the end of October, the watchdog calculated this would just about be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced breakfast TV to break from its regular schedule. Several weeks prior to the real budget, the country was warned: taxes would rise, and the main reason cited as gloomy numbers from the OBR, in particular its finding suggesting the UK had become less productive, investing more but getting less out.

And lo! It happened. Notwithstanding what Telegraph editorials and Tory media appearances implied over the weekend, that is basically what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Justification

The way in which Reeves misled us concerned her justification, because these OBR forecasts didn't force her hand. She might have chosen other choices; she might have provided other reasons, including on budget day itself. Prior to last year's election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The potential for national renewal."

One year later, yet it is a lack of agency that jumps out in Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself to be a technocrat at the mercy of forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any party would be standing here today, facing the choices that I face."

She did make decisions, just not the kind the Labour party wishes to publicize. From April 2029 British workers and businesses will be contributing another £26bn annually in tax – but the majority of this will not go towards spent on better hospitals, public services, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "benefits street".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of the additional revenue will in fact give Reeves a buffer against her self-imposed fiscal rules. Approximately 25% goes on paying for the government's own policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt towards Reeves, a mere 17% of the tax take will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been an act of political theatre by George Osborne. This administration should have abolished it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform and all of right-wing media have been railing against the idea that Reeves fits the caricature of left-wing finance ministers, soaking hard workers to fund shirkers. Party MPs are applauding her budget as balm for their social concerns, protecting the most vulnerable. Each group could be 180-degrees wrong: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and participants within the bond markets.

The government could present a compelling argument in its defence. The forecasts provided by the OBR were too small to feel secure, especially considering lenders charge the UK the highest interest rate among G7 rich countries – higher than France, that recently lost its leader, and exceeding Japan that carries far greater debt. Coupled with our measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan enables the central bank to reduce interest rates.

You can see why those wearing Labour badges may choose not to frame it this way when they visit the doorstep. As one independent adviser to Downing Street puts it, Reeves has "utilised" the bond market as an instrument of discipline over Labour MPs and the electorate. It's the reason the chancellor cannot resign, regardless of which pledges she breaks. It's why Labour MPs must fall into line and support measures to take billions off social security, as Starmer promised recently.

A Lack of Statecraft and an Unfulfilled Pledge

What's missing from this is the notion of statecraft, of mobilising the Treasury and the Bank to forge a fresh understanding with markets. Also absent is innate understanding of voters,