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The allegation carries significant weight: that Rachel Reeves may have deceived UK citizens, frightening them into accepting billions in additional taxes which would be used for higher welfare payments. While exaggerated, this is not typical political bickering; this time, the stakes are more serious. A week ago, detractors of Reeves alongside Keir Starmer were calling their budget "disorderly". Now, it's branded as falsehoods, with Kemi Badenoch demanding the chancellor to quit.

Such a serious accusation requires clear responses, therefore let me provide my view. Did the chancellor lied? On current evidence, no. There were no whoppers. However, despite Starmer's recent comments, that doesn't mean there is nothing to see and we should move on. The Chancellor did misinform the public about the considerations shaping her decisions. Was this all to funnel cash to "welfare recipients", like the Tories claim? Certainly not, and the numbers prove this.

A Standing Sustains Another Blow, Yet Truth Must Prevail

Reeves has taken another hit to her standing, but, should facts still have anything to do with politics, Badenoch should call off her attack dogs. Perhaps the resignation yesterday of OBR head, Richard Hughes, over the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

Yet the true narrative is much more unusual compared to the headlines suggest, and stretches wider and further than the political futures of Starmer and the 2024 intake. At its heart, this is a story concerning how much say you and I have over the running of the nation. This should concern you.

Firstly, to Brass Tacks

When the OBR published recently some of the projections it shared with Reeves as she prepared the red book, the surprise was instant. Not merely has the OBR not acted this way before (an "exceptional move"), its numbers apparently contradicted Reeves's statements. While rumors from Westminster were about how bleak the budget was going to be, the OBR's own forecasts were improving.

Consider the government's so-called "unbreakable" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services must be wholly paid for by taxes: in late October, the watchdog calculated this would just about be met, albeit only by a tiny margin.

Several days later, Reeves held a press conference so extraordinary it forced morning television to interrupt its usual fare. Several weeks prior to the actual budget, the country was warned: taxes were going up, with the primary cause being gloomy numbers from the OBR, in particular its finding that the UK was less efficient, putting more in but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied recently, that is essentially what transpired during the budget, which was significant, harsh, and grim.

The Misleading Justification

The way in which Reeves deceived us was her justification, because those 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 pledged exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it is a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself as a technocrat at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She did make a choice, just not one the Labour party wishes to publicize. Starting April 2029 UK workers as well as businesses are set to be paying another £26bn a year in taxes – but most of that will not go towards spent on improved healthcare, new libraries, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of this additional revenue will instead give Reeves a buffer for her self-imposed fiscal rules. Approximately 25% is allocated to paying for the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible to a Labour chancellor, only 17% of the tax take will go on genuinely additional spending, for example scrapping the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always a bit of theatrical cruelty from George Osborne. This administration could and should have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform and all of Blue Pravda have spent days barking about how Reeves fits the caricature of Labour chancellors, taxing strivers to fund shirkers. Party MPs are cheering her budget as balm for their troubled consciences, protecting the most vulnerable. Each group could be completely mistaken: Reeves's budget was largely aimed at asset managers, speculative capital and the others in the financial markets.

The government could present a compelling argument in its defence. The margins provided by the OBR were too small for comfort, especially given that bond investors charge the UK the highest interest rate among G7 developed nations – higher than France, which lost a prime minister, higher than Japan that carries way more debt. Combined with our policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say this budget enables the central bank to reduce its key lending rate.

You can see that those wearing red rosettes might not couch it this way next time they're on #Labourdoorstep. As one independent adviser for Downing Street puts it, Reeves has "utilised" financial markets to act as a tool of control over Labour MPs and the voters. This is why the chancellor can't resign, regardless of which pledges she breaks. It is also why Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer promised recently.

Missing Statecraft and an Unfulfilled Pledge

What's missing from this is the notion of statecraft, of mobilising the Treasury and the central bank to forge a new accommodation with investors. Missing too is innate understanding of voters,