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This accusation carries significant weight: that Rachel Reeves may have misled the British public, spooking them into accepting massive additional taxes which would be spent on higher benefits. However exaggerated, this isn't usual Westminster sparring; this time, the stakes could be damaging. A week ago, detractors aimed at Reeves and Keir Starmer had been labeling their budget "chaotic". Now, it's branded as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

Such a serious accusation requires straightforward answers, so here is my view. Did the chancellor been dishonest? On current evidence, apparently not. She told no whoppers. But, despite Starmer's yesterday's comments, that doesn't mean there is no issue here and we can all move along. Reeves did misinform the public regarding the factors shaping her decisions. Was this all to funnel cash towards "benefits street", like the Tories assert? Certainly not, as the numbers prove it.

A Reputation Sustains A Further Hit, But Facts Should Prevail

Reeves has taken a further blow to her standing, but, if facts still matter in politics, Badenoch should stand down her lynch mob. Maybe the resignation yesterday of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

Yet the real story is far stranger compared to media reports suggest, extending wider and further beyond the political futures of Starmer and the class of '24. Fundamentally, herein lies a story concerning what degree of influence you and I get in the governance of our own country. And it concern you.

First, on to the Core Details

When the OBR released recently a portion of the projections it provided to Reeves while she prepared the budget, the shock was immediate. Not merely had the OBR never done such a thing before (described as an "exceptional move"), its figures seemingly contradicted the chancellor's words. While leaks from Westminster were about the grim nature of the budget would have to be, the OBR's own forecasts were improving.

Consider the Treasury's most "iron-clad" rule, stating by 2030 daily spending on hospitals, schools, and other services would be completely paid for by taxes: in late October, the OBR reckoned this would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented it forced breakfast TV to break from its usual fare. Several weeks before the real budget, the country was put on alert: taxes would rise, and the main reason cited as gloomy numbers from the OBR, in particular its conclusion that the UK had become less efficient, investing more but yielding less.

And so! It came to pass. Despite what Telegraph editorials and Tory broadcast rounds suggested over the weekend, this is basically what transpired during the budget, which was significant, harsh, and grim.

The Deceptive Justification

Where Reeves misled us was her alibi, since those OBR forecasts did not force her hand. She could have chosen other choices; she might have given alternative explanations, even during the statement. Prior to the recent election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, and it's a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces beyond her control: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any party would be standing here today, facing the choices that I face."

She certainly make decisions, only not one the Labour party wishes to broadcast. From April 2029 UK workers and businesses will be paying an additional £26bn a year in tax – but most of that will not go towards spent on better hospitals, new libraries, nor happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Really Goes

Instead of going on services, over 50% of the additional revenue will in fact give Reeves a buffer against her self-imposed budgetary constraints. About 25% is allocated to paying for the administration's U-turns. 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 actual new spending, for example scrapping the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been a bit of political theatre by George Osborne. A Labour government could and should abolished it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform and the entire right-wing media have been barking about how Reeves fits the caricature of Labour chancellors, taxing hard workers to fund the workshy. Labour backbenchers have been applauding her budget as a relief for their troubled consciences, safeguarding the most vulnerable. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, hedge funds and the others in the financial markets.

Downing Street can make a compelling argument for itself. The margins from the OBR were deemed too small to feel secure, particularly considering lenders charge the UK the highest interest rate of all G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan which has far greater debt. Combined with the policies to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the Bank of England to cut interest rates.

It's understandable that those wearing Labour badges might not frame it in such terms next time they're on the doorstep. As a consultant for Downing Street puts it, Reeves has effectively "weaponised" the bond market to act as a tool of control over Labour MPs and the electorate. This is why the chancellor can't resign, no matter what pledges are broken. It is also the reason Labour MPs must fall into line and vote that cut billions from social security, as Starmer indicated recently.

Missing Political Vision and an Unfulfilled Promise

What's missing here is any sense of strategic governance, of harnessing the Treasury and the central bank to forge a fresh understanding with markets. Also absent is innate understanding of voters,