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The charge represents a grave matter: suggesting Rachel Reeves may have lied to the British public, spooking them into accepting massive additional taxes that would be spent on higher welfare payments. However exaggerated, this is not usual Westminster bickering; this time, the consequences are higher. A week ago, critics of Reeves alongside Keir Starmer were calling their budget "uncoordinated". Now, it is branded as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

Such a grave charge demands straightforward answers, therefore here is my assessment. Has the chancellor been dishonest? On the available information, apparently not. She told no major untruths. However, despite Starmer's recent remarks, that doesn't mean there is nothing to see and we can all move along. The Chancellor did misinform the public about the considerations informing her choices. Was it to funnel cash to "benefits street", as the Tories assert? Certainly not, and the numbers prove this.

A Reputation Takes A Further Blow, Yet Truth Should Prevail

Reeves has taken another hit to her standing, but, if facts still matter in politics, Badenoch should call off her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its own documents will quench Westminster's appetite for scandal.

But the true narrative is much more unusual compared to media reports indicate, extending wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is a story concerning how much say the public get over the running of our own country. This should concern everyone.

Firstly, to the Core Details

When the OBR released recently a portion of the projections it provided to Reeves while she wrote the budget, the shock was immediate. Not merely has the OBR not done such a thing before (an "unusual step"), its figures seemingly went against the chancellor's words. Even as rumors from Westminster were about the grim nature of the budget was going to be, the watchdog's forecasts were improving.

Consider the government's so-called "iron-clad" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest must be wholly paid for by taxes: in late October, the watchdog calculated this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a media briefing so unprecedented it forced breakfast TV to interrupt its regular schedule. Weeks before the actual budget, the nation was warned: taxes were going up, and the main reason being gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK had become less productive, putting more in but yielding less.

And so! It came to pass. Despite the implications from Telegraph editorials combined with Tory media appearances implied over the weekend, that is essentially what happened at the budget, that proved to be big and painful and bleak.

The Misleading Alibi

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

One year later, yet it is powerlessness that is evident from Reeves's breakfast speech. The first Labour chancellor for a decade and a half portrays herself as a technocrat at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She certainly make decisions, just not the kind Labour cares to publicize. From April 2029 UK workers as well as businesses will be paying an additional £26bn annually in tax – and most of that will not go towards spent on better hospitals, new libraries, or enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Money Actually Ends Up

Instead of being spent, more than 50% of this extra cash will instead provide Reeves a buffer against her own fiscal rules. About 25% is allocated to covering the administration's U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt towards Reeves, only 17% of the taxes will go on actual new spending, such as scrapping the two-child cap on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it was always an act of theatrical cruelty by George Osborne. This administration could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with all of right-wing media have been barking about how Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to spend on the workshy. Labour backbenchers are applauding her budget as a relief for their social concerns, safeguarding the most vulnerable. Both sides could be completely mistaken: Reeves's budget was primarily aimed at asset managers, speculative capital and participants within the financial markets.

The government could present a compelling argument for itself. The forecasts provided by the OBR were too small to feel secure, particularly given that lenders demand from the UK the highest interest rate among G7 rich countries – higher than France, that recently lost its leader, higher than Japan that carries far greater debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the Bank of England to reduce interest rates.

It's understandable that those wearing red rosettes may choose not to couch it this way when they visit #Labourdoorstep. As a consultant for Downing Street says, Reeves has effectively "weaponised" financial markets to act as an instrument of discipline over Labour MPs and the voters. This is the reason the chancellor cannot resign, no matter what pledges she breaks. It is also why Labour MPs must fall into line and support measures that cut billions from social security, just as Starmer indicated recently.

Missing Statecraft , an Unfulfilled Promise

What's missing from this is any sense of statecraft, of harnessing the Treasury and the Bank to forge a new accommodation with investors. Also absent is intuitive knowledge of voters,