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This accusation represents a grave matter: suggesting Rachel Reeves may have deceived UK citizens, frightening them to accept billions in additional taxes which could be spent on higher welfare payments. However exaggerated, this isn't typical Westminster bickering; on this occasion, the consequences are more serious. Just last week, critics of Reeves alongside Keir Starmer were calling their budget "uncoordinated". Now, it's denounced as lies, with Kemi Badenoch demanding the chancellor to quit.

Such a serious charge demands clear answers, therefore let me provide my assessment. Did the chancellor tell lies? On current information, apparently not. There were no blatant falsehoods. However, notwithstanding Starmer's recent remarks, that doesn't mean there is nothing to see and we can all move along. Reeves did misinform the public regarding the factors informing her decisions. Was it to funnel cash to "welfare recipients", like the Tories claim? Certainly not, as the figures prove it.

A Standing Sustains Another Hit, But Facts Should Win Out

The Chancellor has taken another hit to her reputation, but, if facts still have anything to do with politics, Badenoch should call off her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will quench SW1's appetite for scandal.

But the real story is much more unusual compared to the headlines indicate, and stretches broader and deeper than the careers of Starmer and the 2024 intake. Fundamentally, this is a story concerning how much say the public have over the governance of our own country. And it concern you.

First, to the Core Details

When the OBR released last Friday a portion of the forecasts it shared with Reeves as she wrote the budget, the shock was immediate. Not only had the OBR never done such a thing before (described as an "unusual step"), its numbers apparently contradicted Reeves's statements. While leaks from Westminster suggested how bleak the budget would have to be, the OBR's own predictions were improving.

Take the government's so-called "iron-clad" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services would be wholly paid for by taxes: in late October, the watchdog reckoned it would barely be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented it forced morning television to break from its regular schedule. Several weeks prior to the actual budget, the nation was warned: taxes were going up, and the main reason cited as gloomy numbers from the OBR, in particular its finding suggesting the UK was less efficient, putting more in but getting less out.

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

The Deceptive Alibi

The way in which Reeves misled us concerned her justification, since these OBR forecasts did not compel her actions. She could have made different options; she might have given other reasons, including on budget day itself. Before last year's election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

One year later, and it is a lack of agency that is evident in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself as a technocrat buffeted by factors beyond her control: "In the context of the persistent challenges with our productivity … any finance minister of any party would be in this position today, confronting the choices that I face."

She did make a choice, just not the kind Labour wishes to broadcast. From April 2029 UK workers and businesses will be paying another £26bn a year in tax – and the majority of this will not be spent on improved healthcare, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of going on services, over 50% of the extra cash will in fact provide Reeves a buffer for her self-imposed fiscal rules. Approximately 25% goes on covering the administration's U-turns. Reviewing the OBR's calculations and being as generous as possible to Reeves, only 17% of the tax take will go on actual new spending, for example abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always a bit of theatrical cruelty by George Osborne. This administration should have abolished it immediately upon taking office.

The True Audience: Financial Institutions

Conservatives, Reform along with the entire Blue Pravda have been barking about how Reeves fits the caricature of Labour chancellors, soaking hard workers to fund the workshy. Labour backbenchers have been applauding her budget as balm for their troubled consciences, safeguarding the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was primarily aimed at investment funds, hedge funds and the others in the bond markets.

Downing Street could present a compelling argument for itself. The forecasts from the OBR were deemed too small to feel secure, particularly considering bond investors charge the UK the highest interest rate of all G7 developed nations – higher than France, that recently lost its leader, and exceeding Japan that carries far greater debt. Coupled with our measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget allows the Bank of England to reduce interest rates.

You can see that those wearing red rosettes may choose not to couch it in such terms next time they're on #Labourdoorstep. As one independent adviser for Downing Street puts it, Reeves has "weaponised" the bond market as an instrument of discipline over Labour MPs and the voters. It's the reason Reeves can't resign, regardless of which promises are broken. It is also why Labour MPs must knuckle down and support measures to take billions off social security, just as Starmer indicated recently.

A Lack of Statecraft and a Broken Pledge

What's missing from this is any sense of statecraft, of mobilising the Treasury and the central bank to reach a new accommodation with markets. Also absent is intuitive knowledge of voters,