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This accusation is a serious one: suggesting Rachel Reeves may have deceived Britons, scaring them to accept billions in additional taxes which would be used for higher benefits. While hyperbolic, this isn't typical political sparring; this time, the consequences are higher. A week ago, detractors of Reeves and Keir Starmer had been labeling their budget "a mess". Now, it is branded as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

This serious charge demands straightforward answers, therefore let me provide my assessment. Has the chancellor been dishonest? On current information, no. She told no major untruths. But, notwithstanding Starmer's recent remarks, it doesn't follow that there is no issue here and we can all move along. The Chancellor did mislead the public regarding the factors shaping her decisions. Was this all to funnel cash towards "welfare recipients", like the Tories assert? No, and the figures demonstrate it.

A Reputation Takes A Further Blow, Yet Truth Must Win Out

Reeves has sustained another hit to her standing, however, if facts still matter in politics, Badenoch should stand down her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's thirst for blood.

But the real story is much more unusual compared to the headlines indicate, extending broader and deeper beyond the political futures of Starmer and his 2024 intake. Fundamentally, this is an account about how much say the public have in the running of the nation. And it should worry everyone.

Firstly, on to the Core Details

After the OBR published recently a portion of the forecasts it shared with Reeves while she prepared the budget, the shock was immediate. Not only has the OBR not acted this way before (an "exceptional move"), its numbers seemingly went against Reeves's statements. Even as leaks from Westminster were about how bleak the budget would have to be, the OBR's own forecasts were getting better.

Consider the Treasury's most "unbreakable" fiscal rule, stating by 2030 daily spending for hospitals, schools, and other services would be wholly funded by taxes: in late October, the watchdog reckoned this would just about be met, albeit only by a tiny margin.

Several days later, Reeves gave a media briefing so unprecedented it forced morning television to break from its usual fare. Several weeks prior to the real budget, the nation was put on alert: taxes were going up, with the main reason cited as gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, investing more but yielding less.

And so! It happened. Notwithstanding the implications from Telegraph editorials and Tory media appearances implied recently, this is basically what happened during the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us concerned her alibi, because these OBR forecasts did not compel her actions. She could have made different options; she could have provided other reasons, even on budget day itself. Prior to the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it is a lack of agency that is evident in Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself as an apolitical figure buffeted by forces outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be in this position today, facing the decisions that I face."

She did make decisions, just not one Labour cares to publicize. From April 2029 UK workers as well as businesses will be paying an additional £26bn a year in tax – and most of that will not be funding improved healthcare, public services, or enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Cash Actually Ends Up

Instead of going on services, over 50% of the extra cash will in fact provide Reeves a buffer against her self-imposed fiscal rules. About 25% goes on covering the government's own U-turns. Reviewing the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the tax take will fund genuinely additional spending, such as abolishing the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, because it was always a bit of theatrical cruelty from George Osborne. This administration could and should abolished it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform and all of right-wing media have spent days barking about the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to spend on shirkers. Labour backbenchers have been applauding her budget as balm to their social concerns, safeguarding the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was largely targeted towards investment funds, hedge funds and the others in the financial markets.

The government could present a compelling argument for itself. The margins provided by the OBR were deemed too small to feel secure, especially given that bond investors demand from the UK the highest interest rate of all G7 developed nations – higher than France, which lost its leader, higher than Japan that carries way more debt. Combined with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the central bank to cut its key lending rate.

It's understandable why those folk with Labour badges might not couch it in such terms when they visit the doorstep. As a consultant for Downing Street puts it, Reeves has effectively "weaponised" the bond market as a tool of control against her own party and the voters. This is why Reeves cannot resign, no matter what promises are broken. It is also the reason Labour MPs will have to fall into line and support measures to take billions off social security, just as Starmer indicated recently.

A Lack of Political Vision and a Broken Pledge

What's missing here is any sense of strategic governance, of mobilising the finance ministry and the central bank to reach a new accommodation with markets. Also absent is innate understanding of voters,