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This allegation carries significant weight: suggesting Rachel Reeves has lied to the British public, frightening them into accepting billions in additional taxes that would be spent on increased welfare payments. However exaggerated, this is not usual political sparring; on this occasion, the stakes are higher. A week ago, critics of Reeves alongside Keir Starmer had been calling their budget "a mess". Today, it is branded as lies, with Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge demands clear answers, therefore let me provide my assessment. Has the chancellor been dishonest? Based on the available information, apparently not. She told no major untruths. However, despite Starmer's yesterday's remarks, it doesn't follow that there's no issue here and we should move on. The Chancellor did mislead the public regarding the considerations informing her choices. Was it to channel cash towards "benefits street", as the Tories assert? No, and the figures prove it.

A Standing Sustains A Further Blow, But Facts Should Prevail

Reeves has taken a further blow to her reputation, but, if facts continue to matter in politics, Badenoch ought to stand down her attack dogs. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's appetite for scandal.

Yet the real story is much more unusual than media reports indicate, and stretches broader and deeper than the careers of Starmer and his class of '24. Fundamentally, herein lies a story about what degree of influence you and I get in the governance of our own country. This should concern everyone.

Firstly, on to Brass Tacks

After the OBR published last Friday some of the projections it provided to Reeves as she wrote the budget, the surprise was immediate. Not merely had the OBR never acted this way before (an "rare action"), its figures apparently went against Reeves's statements. Even as rumors from Westminster suggested the grim nature of the budget would have to be, the watchdog's predictions were improving.

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

Several days later, Reeves held a press conference so extraordinary it forced morning television to break from its regular schedule. Weeks before the actual budget, the country was put on alert: taxes would rise, and the primary cause cited as pessimistic numbers provided by the OBR, in particular its conclusion that the UK had become less productive, putting more in but getting less out.

And so! It came to pass. Notwithstanding what Telegraph editorials and Tory broadcast rounds implied recently, that is basically what transpired at the budget, which was significant, harsh, and grim.

The Misleading Justification

The way in which Reeves deceived us concerned her justification, since those OBR forecasts did not force her hand. She could have chosen different options; she might have provided alternative explanations, including on budget day itself. Prior to last year's election, Starmer promised precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it is powerlessness that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half casts herself as a technocrat buffeted by factors outside her influence: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any party would be standing here today, confronting the decisions that I face."

She certainly make decisions, only not the kind Labour wishes to broadcast. From April 2029 British workers as well as businesses are set to be contributing an additional £26bn annually in taxes – but the majority of this will not be spent on improved healthcare, new libraries, nor enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Rather than going on services, over 50% of the extra cash will in fact provide Reeves a buffer against her self-imposed fiscal rules. About 25% goes on paying for the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible to Reeves, only 17% of the taxes will go on actual new spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, as it was always a bit of political theatre from George Osborne. This administration should have abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have been barking about the idea that Reeves fits the stereotype of left-wing finance ministers, soaking hard workers to spend on shirkers. Party MPs have been applauding her budget as balm to their troubled consciences, safeguarding the disadvantaged. Each group could be 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, hedge funds and participants within the bond markets.

The government could present a compelling argument in its defence. The margins provided by the OBR were too small for comfort, especially considering lenders demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan which has way more debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan allows the Bank of England to cut interest rates.

It's understandable why those wearing red rosettes may choose not to couch it this way next time they visit the doorstep. As a consultant to Downing Street says, Reeves has "utilised" the bond market as an instrument of control over her own party and the voters. This is the reason Reeves can't resign, no matter what pledges are broken. It's the reason Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer promised yesterday.

Missing Statecraft , a Broken Pledge

What's missing from this is any sense of statecraft, of mobilising the Treasury and the Bank to forge a fresh understanding with investors. Missing too is innate understanding of voters,