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This allegation is a serious one: that Rachel Reeves may have misled the British public, frightening them into accepting massive extra taxes that could be used for increased welfare payments. However hyperbolic, this is not usual political sparring; this time, the stakes could be damaging. Just last week, detractors aimed at Reeves alongside Keir Starmer were calling their budget "a shambles". Now, it's denounced as falsehoods, with Kemi Badenoch calling for Reeves to step down.

Such a serious accusation demands clear answers, so let me provide my view. Has the chancellor been dishonest? On the available information, no. There were no whoppers. However, despite Starmer's recent remarks, that doesn't mean there is no issue here and we should move on. Reeves did mislead the public about the factors shaping her decisions. Was this all to funnel cash towards "welfare recipients", as the Tories claim? Certainly not, and the figures prove it.

A Standing Takes Another Hit, But Facts Should Win Out

Reeves has taken a further hit to her standing, but, should facts continue to matter in politics, Badenoch should stand down her attack dogs. Perhaps the resignation recently of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

Yet the true narrative is far stranger than the headlines suggest, extending wider and further than the political futures of Starmer and the class of '24. At its heart, herein lies a story about how much say the public get in the governance of the nation. This should should worry you.

Firstly, on to the Core Details

After the OBR published last Friday some of the projections it provided to Reeves while she wrote the budget, the surprise was instant. Not merely had the OBR never done such a thing before (an "rare action"), its numbers seemingly went against Reeves's statements. While rumors from Westminster were about how bleak the budget would have to be, the OBR's own predictions were improving.

Take the Treasury's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and the rest must be wholly funded by taxes: at the end of October, the OBR calculated it would barely be met, albeit only by a tiny margin.

Several days later, Reeves held a press conference so unprecedented it forced breakfast TV to break from its regular schedule. Several weeks prior to the real budget, the country was warned: taxes were going up, with the primary cause cited as pessimistic numbers provided by the OBR, specifically its conclusion suggesting the UK had become less efficient, putting more in but yielding less.

And lo! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is essentially what happened during the budget, which was significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves misled us was her alibi, since these OBR forecasts did not compel her actions. She might have made other choices; she might have provided other reasons, including during the statement. Prior to the recent election, Starmer pledged precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it's a lack of agency that jumps out in Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself as a technocrat at the mercy of factors beyond her control: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any party would be in this position today, facing the decisions that I face."

She certainly make decisions, just not one the Labour party cares to publicize. Starting April 2029 British workers and businesses will be paying another £26bn annually in taxes – and the majority of this will not go towards spent on better hospitals, public services, nor enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Instead of going on services, more than 50% of this additional revenue will instead give Reeves a buffer against her self-imposed fiscal rules. About 25% is allocated to paying for the administration's U-turns. Reviewing the OBR's calculations and being as generous as possible to a Labour chancellor, only 17% of the taxes will go on actual new spending, for example abolishing the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always an act of political theatre from George Osborne. This administration could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform and the entire right-wing media have spent days railing against the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to fund the workshy. Labour backbenchers have been cheering her budget for being balm to their troubled consciences, safeguarding the most vulnerable. Each group are 180-degrees wrong: Reeves's budget was primarily targeted towards investment funds, speculative capital and participants within the bond markets.

The government could present a compelling argument for itself. The forecasts provided by the OBR were deemed insufficient for comfort, particularly given that bond investors charge the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan which has way more debt. Coupled with our policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the central bank to reduce its key lending rate.

It's understandable why those wearing red rosettes may choose not to couch it this way when they visit the doorstep. According to one independent adviser for Downing Street says, Reeves has "utilised" the bond market to act as a tool of discipline against her own party and the electorate. It's the reason the chancellor cannot resign, no matter what pledges are broken. It's 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 is absent from this is any sense of strategic governance, of mobilising the Treasury and the central bank to forge a fresh understanding with markets. Missing too is any innate understanding of voters,