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This allegation carries significant weight: suggesting Rachel Reeves has misled UK citizens, spooking them into accepting massive extra taxes that would be spent on increased welfare payments. While hyperbolic, this isn't typical Westminster bickering; this time, the consequences could be damaging. Just last week, critics aimed at Reeves and Keir Starmer had been calling their budget "a shambles". Now, it's denounced as falsehoods, with Kemi Badenoch demanding the chancellor to quit.

This grave accusation requires straightforward responses, so let me provide my view. Has the chancellor been dishonest? On current evidence, no. She told no blatant falsehoods. However, despite Starmer's yesterday's remarks, that doesn't mean there is nothing to see and we can all move along. Reeves did misinform the public about the factors shaping her decisions. Was this all to funnel cash to "welfare recipients", like the Tories claim? No, and the numbers demonstrate it.

A Reputation Sustains A Further Blow, But Facts Should Prevail

The Chancellor has taken another blow to her standing, but, should facts still matter in politics, Badenoch should call off her lynch mob. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

Yet the real story is much more unusual compared to media reports suggest, and stretches broader and deeper than the political futures of Starmer and the class of '24. At its heart, this is a story concerning how much say you and I get in the running of the nation. This should concern you.

Firstly, to Brass Tacks

When the OBR released recently a portion of the projections it shared with Reeves as she wrote the budget, the surprise was instant. Not merely had the OBR not acted this way before (an "exceptional move"), its figures apparently contradicted Reeves's statements. Even as 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" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest would be wholly paid for by taxes: at the end of October, the OBR reckoned this would barely be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented that it caused morning television to interrupt its usual fare. Several weeks prior to the actual budget, the nation was warned: taxes would rise, with the primary cause cited as gloomy numbers provided by the OBR, specifically its conclusion that the UK was less productive, putting more in but getting less out.

And so! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances implied recently, that is essentially what transpired at the budget, which was significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us was her alibi, because those OBR forecasts didn't force her hand. She could have made other choices; she might have given other reasons, even on budget day itself. Before the recent election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it's a lack of agency that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by factors beyond her control: "In the context of the long-term challenges with our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She did make a choice, only not the kind the Labour party cares to broadcast. Starting April 2029 British workers and businesses are set to be paying another £26bn a year in taxes – and most of that will not go towards funding better hospitals, public services, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of this additional revenue will instead provide Reeves a buffer against her self-imposed fiscal rules. About 25% is allocated to paying for the administration's U-turns. Examining the OBR's calculations and being as generous as possible towards Reeves, only 17% of the tax take will go on genuinely additional spending, such as scrapping the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been an act of political theatre from George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and the entire right-wing media have been barking about the idea that Reeves fits the caricature of Labour chancellors, soaking strivers to fund shirkers. Labour backbenchers are applauding her budget for being balm to their social concerns, protecting the most vulnerable. Both sides are completely mistaken: Reeves's budget was primarily aimed at asset managers, hedge funds and participants within the bond markets.

Downing Street can make a compelling argument in its defence. The margins provided by the OBR were too small for comfort, particularly considering lenders demand from the UK the highest interest rate among G7 developed nations – exceeding that of France, which lost a prime minister, higher than Japan that carries way more debt. Coupled with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget allows the Bank of England to reduce its key lending rate.

You can see that those folk with Labour badges may choose not to frame it in such terms when they're on the doorstep. As one independent adviser to Downing Street says, Reeves has "weaponised" financial markets to act as a tool of discipline over Labour MPs and the electorate. This is the reason Reeves cannot resign, no matter what pledges she breaks. It's why Labour MPs must knuckle down and vote to take billions off social security, as Starmer promised recently.

Missing Political Vision and an Unfulfilled Pledge

What's missing from this is the notion of statecraft, of harnessing the Treasury and the Bank to forge a fresh understanding with markets. Missing too is intuitive knowledge of voters,