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This charge carries significant weight: suggesting Rachel Reeves has lied to Britons, frightening them into accepting massive additional taxes that would be funneled into increased welfare payments. While exaggerated, this isn't usual political bickering; this time, the consequences are higher. A week ago, critics aimed at Reeves and Keir Starmer had been calling their budget "chaotic". Today, it's branded as falsehoods, and Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge demands clear answers, so let me provide my assessment. Did the chancellor tell lies? On the available evidence, no. There were no whoppers. However, despite Starmer's yesterday's remarks, it doesn't follow that there's nothing to see and we can all move along. The Chancellor did mislead the public about the considerations shaping her choices. Was this all to funnel cash towards "benefits street", as the Tories claim? Certainly not, as the figures prove this.

A Reputation Takes A Further Blow, But Facts Should Prevail

The Chancellor has taken a further hit to her standing, but, should facts continue to matter in politics, Badenoch should stand down her attack dogs. Maybe the resignation yesterday of OBR head, Richard Hughes, over the leak of its internal documents will quench Westminster's thirst for blood.

But the real story is far stranger than media reports suggest, extending broader and deeper beyond the careers of Starmer and his 2024 intake. Fundamentally, this is a story concerning what degree of influence the public have over the running of the nation. And it concern you.

First, on to the Core Details

After the OBR released recently a portion of the forecasts it provided to Reeves while she wrote the red book, the surprise was immediate. Not merely had the OBR never done such a thing before (described as an "rare action"), its figures apparently contradicted Reeves's statements. Even as leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Consider the Treasury's most "unbreakable" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest would be completely funded by taxes: in late October, the watchdog calculated this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to break from its regular schedule. Weeks prior to the real budget, the country was put on alert: taxes would rise, and the primary cause being pessimistic numbers provided by the OBR, in particular its finding suggesting the UK was less efficient, putting more in but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested recently, that is basically what transpired during the budget, which was significant, harsh, and grim.

The Deceptive Justification

Where Reeves misled us was her justification, because those OBR forecasts didn't compel her actions. She could have made different options; she could have given alternative explanations, even during the statement. Before the recent election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it's a lack of agency that jumps out from Reeves's breakfast speech. The first Labour chancellor in 15 years portrays herself as an apolitical figure buffeted by factors outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any party would be in this position today, facing the choices that I face."

She did make decisions, just not one Labour wishes to broadcast. Starting April 2029 UK workers and businesses will be paying an additional £26bn annually in tax – but most of that will not go towards funding improved healthcare, public services, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of being spent, more than 50% of this additional revenue will in fact provide Reeves a buffer for her own budgetary constraints. Approximately 25% is allocated to paying for the government's own U-turns. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the tax take will go on actual new spending, such as scrapping the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it had long been a bit of theatrical cruelty by George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform along with all of Blue Pravda have been railing against how Reeves fits the stereotype of Labour chancellors, soaking strivers to spend on shirkers. Labour backbenchers are applauding her budget as balm for their troubled consciences, protecting the disadvantaged. Each group are completely mistaken: Reeves's budget was primarily targeted towards investment funds, speculative capital and the others in the bond markets.

The government could present a strong case for itself. The margins provided by the OBR were insufficient to feel secure, particularly considering lenders charge the UK the highest interest rate of all G7 developed nations – higher than France, which lost its leader, higher than Japan which has far greater debt. Combined with our measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget enables the central bank to cut interest rates.

You can see that those wearing red rosettes may choose not to frame it in such terms next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has "utilised" the bond market to act as an instrument of control against Labour MPs and the voters. This is why Reeves can't resign, regardless of which 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, as Starmer indicated yesterday.

A Lack of Statecraft and a Broken Pledge

What is absent here is any sense of strategic governance, of harnessing the Treasury and the central bank to reach a new accommodation with investors. Also absent is any innate understanding of voters,