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The accusation represents a grave matter: suggesting Rachel Reeves may have lied to Britons, frightening them into accepting billions in extra taxes which would be funneled into higher welfare payments. While hyperbolic, this is not usual political bickering; this time, the stakes could be damaging. A week ago, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "chaotic". Today, it's branded as lies, and Kemi Badenoch calling for the chancellor to quit.

Such a serious charge demands clear responses, so let me provide my assessment. Did the chancellor tell lies? Based on current information, no. She told no major untruths. However, notwithstanding Starmer's recent comments, that doesn't mean there's nothing to see and we should move on. Reeves did mislead the public about the considerations shaping her decisions. Was this all to funnel cash to "welfare recipients", as the Tories assert? No, as the numbers demonstrate it.

A Standing Sustains Another Blow, Yet Truth Should Prevail

The Chancellor has sustained another hit to her standing, but, should facts still have anything to do with politics, Badenoch should stand down her lynch mob. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will quench SW1's thirst for blood.

Yet the real story is far stranger compared to media reports indicate, and stretches wider and further beyond the careers of Starmer and the class of '24. At its heart, this is an account concerning what degree of influence you and I get over the governance of the nation. And it concern you.

First, to Brass Tacks

When the OBR released recently some of the forecasts it provided to Reeves as she wrote the budget, the shock was immediate. Not merely had the OBR not done such a thing before (described as an "rare action"), its numbers seemingly contradicted Reeves's statements. While rumors from Westminster suggested how bleak the budget was going to be, the OBR's own forecasts were improving.

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

A few days later, Reeves gave a press conference so extraordinary it forced morning television to interrupt its usual fare. Several weeks prior to the real budget, the nation was warned: taxes would rise, and the primary cause being gloomy numbers from the OBR, in particular its conclusion that the UK had become less efficient, putting more in but getting less out.

And lo! It came to pass. Notwithstanding what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is basically what happened during the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us concerned her justification, since these OBR forecasts didn't compel her actions. She could have made other choices; she could have given other reasons, even during the statement. Before last year's election, Starmer pledged exactly such people power. "The hope of democracy. The power of the vote. The potential for national renewal."

A year on, yet it is a lack of agency that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure buffeted by factors outside her influence: "In the context of the persistent challenges with our productivity … any chancellor of any party would be standing here today, confronting the decisions that I face."

She did make decisions, only not one Labour wishes to publicize. Starting April 2029 UK workers as well as businesses are set to be contributing another £26bn a year in tax – and the majority of this will not go towards funding improved healthcare, public services, nor happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Money Really Goes

Instead of going on services, more than 50% of the additional revenue will instead give Reeves cushion against her self-imposed fiscal rules. About 25% goes on paying for the administration's policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, a mere 17% of the tax take will fund genuinely additional spending, for example abolishing the limit 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 could and should abolished it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform and all of right-wing media have been barking about how Reeves fits the stereotype of Labour chancellors, taxing hard workers to spend on the workshy. Labour backbenchers are cheering her budget for being balm to their troubled consciences, protecting the most vulnerable. Both sides could be completely mistaken: Reeves's budget was largely aimed at investment funds, speculative capital and participants within the financial markets.

Downing Street can make a strong case in its defence. The margins from the OBR were deemed too small to feel secure, especially considering lenders demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, that recently lost a prime minister, and exceeding Japan which has way more debt. Coupled with the policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the central bank to reduce interest rates.

You can see why those folk with red rosettes might not frame it in such terms next time they're on the doorstep. As a consultant for Downing Street puts it, Reeves has "utilised" financial markets to act as a tool of control against Labour MPs and the voters. This is why the chancellor cannot resign, no matter what promises are broken. It is also why Labour MPs must knuckle down and vote to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft and an Unfulfilled Promise

What's missing from this is the notion of strategic governance, of mobilising the Treasury and the Bank to forge a new accommodation with markets. Missing too is innate understanding of voters,