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This allegation carries significant weight: that Rachel Reeves may have misled UK citizens, scaring them to accept billions in additional taxes which would be funneled into higher benefits. However exaggerated, this isn't usual Westminster sparring; this time, the stakes are higher. Just last week, critics aimed at Reeves alongside Keir Starmer were calling their budget "a shambles". Today, it is denounced as lies, with Kemi Badenoch calling for Reeves to step down.

Such a serious accusation requires straightforward responses, therefore let me provide my assessment. Did the chancellor tell lies? On current evidence, no. She told no blatant falsehoods. However, despite Starmer's recent remarks, that doesn't mean there's nothing to see and we should move on. The Chancellor did misinform the public regarding the considerations shaping her choices. Was this all to channel cash to "welfare recipients", as the Tories assert? Certainly not, as the numbers prove this.

A Standing Sustains A Further Hit, Yet Truth Must Prevail

Reeves has sustained another blow to her standing, but, if facts still have anything to do with politics, Badenoch ought to call off her lynch mob. Maybe the stepping down recently of OBR head, Richard Hughes, over the leak of its internal documents will satisfy SW1's appetite for scandal.

But the real story is much more unusual compared to media reports indicate, and stretches broader and deeper beyond the careers of Starmer and his class of '24. At its heart, this is a story about what degree of influence you and I get over the governance of the nation. This should concern you.

First, on to Brass Tacks

After the OBR released recently a portion of the projections it provided to Reeves while she prepared the budget, the surprise was instant. Not merely has the OBR not done such a thing before (described as an "unusual step"), its numbers seemingly went against Reeves's statements. Even as rumors from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were getting better.

Take the Treasury's most "iron-clad" fiscal rule, stating by 2030 daily spending for hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR calculated this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary it forced breakfast TV to break from its regular schedule. Several weeks prior to the real budget, the nation was put on alert: taxes would rise, with the main reason cited as gloomy numbers provided by the OBR, specifically its conclusion that the UK was less efficient, putting more in but getting less out.

And so! It came to pass. Despite the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, that is essentially what transpired during the budget, that proved to be significant, harsh, and grim.

The Deceptive Alibi

Where Reeves deceived us was her alibi, since these OBR forecasts didn't force her hand. She might have made different options; she might have provided other reasons, even on budget day itself. Prior to last year's election, Starmer promised exactly such people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it is a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years casts herself as an apolitical figure buffeted by forces beyond her control: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She did make a choice, only not one Labour wishes to publicize. From April 2029 British workers and businesses are set to be contributing an additional £26bn annually in tax – and most of that will not go towards spent on improved healthcare, new libraries, or happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Rather than going on services, more than 50% of the extra cash will instead provide Reeves a buffer for her self-imposed fiscal rules. About 25% is allocated to covering the government's own policy reversals. Reviewing the OBR's calculations and being as generous as possible to a Labour chancellor, a mere 17% of the taxes will go on actual new spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it had long been an act of theatrical cruelty from George Osborne. This administration should have have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have been railing against the idea that Reeves conforms to the stereotype of Labour chancellors, taxing strivers to fund shirkers. Labour backbenchers have been applauding her budget as balm to their troubled consciences, 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 strong case in its defence. The margins from the OBR were deemed insufficient to feel secure, particularly considering lenders demand from the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost a prime minister, higher than Japan which has way more debt. Combined 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 couch it in such terms when they visit #Labourdoorstep. As one independent adviser to Downing Street says, Reeves has effectively "weaponised" financial markets as an instrument of control over Labour MPs and the electorate. This is the reason Reeves can't resign, regardless of which pledges she breaks. It's why Labour MPs will have to knuckle down and vote to take billions off social security, just as Starmer promised yesterday.

A Lack of Political Vision and a Broken Pledge

What's missing here is any sense of statecraft, of harnessing the Treasury and the central bank to forge a new accommodation with investors. Missing too is intuitive knowledge of voters,