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This allegation is a serious one: that Rachel Reeves may have lied to Britons, spooking them to accept billions in extra taxes that could be funneled into increased benefits. However hyperbolic, this is not typical Westminster bickering; on this occasion, the stakes are more serious. Just last week, detractors aimed at Reeves and Keir Starmer had been labeling their budget "a mess". Now, it's branded as lies, with Kemi Badenoch calling for the chancellor's resignation.

Such a grave accusation demands clear answers, so let me provide my assessment. Has the chancellor been dishonest? On current information, apparently not. There were no blatant falsehoods. However, despite Starmer's yesterday's comments, it doesn't follow that there is nothing to see and we should move on. Reeves did mislead the public regarding the considerations shaping her choices. Was it to channel cash towards "benefits street", like the Tories claim? No, and the figures demonstrate this.

A Standing Sustains A Further Blow, Yet Truth Must Prevail

The Chancellor has sustained a further hit to her standing, however, should facts still matter in politics, Badenoch should stand down her lynch mob. Maybe the resignation yesterday of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's thirst for blood.

But the true narrative is much more unusual compared to media reports suggest, and stretches broader and deeper beyond the political futures of Starmer and the 2024 intake. Fundamentally, herein lies a story about how much say the public have over the governance of our own country. And it should worry everyone.

First, to the Core Details

After the OBR published last Friday some of the projections it shared with Reeves as she wrote the red book, the surprise was instant. Not merely had the OBR not done such a thing before (an "rare action"), its figures apparently contradicted Reeves's statements. While leaks from Westminster suggested the grim nature of the budget would have to be, the OBR's own predictions were getting better.

Consider the Treasury's most "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and other services must be completely funded by taxes: in late October, the OBR reckoned it would just about be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so extraordinary it forced breakfast TV to interrupt its usual fare. Several weeks before the actual budget, the nation was put on alert: taxes would rise, and the main reason being gloomy numbers from the OBR, specifically its conclusion that the UK had become less efficient, putting more in but getting less out.

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

The Deceptive Alibi

Where Reeves deceived us was her alibi, because these OBR forecasts didn't force her hand. She could have chosen different options; she might have given other reasons, even during the statement. Before the recent election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

A year on, yet it's a lack of agency that jumps out in Reeves's breakfast speech. Our first Labour chancellor in 15 years casts herself as an apolitical figure buffeted by forces beyond her control: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any political stripe would be in this position today, confronting the choices that I face."

She did make a choice, only not the kind Labour cares to broadcast. Starting April 2029 UK workers and businesses will be paying an additional £26bn a year in tax – but the majority of this will not go towards funding improved healthcare, public services, or enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of going on services, more than 50% of the extra cash will in fact provide Reeves a buffer against her own fiscal rules. About 25% goes on covering the government's own U-turns. Examining the OBR's calculations and being as generous as possible towards Reeves, only 17% of the tax take will go on actual new spending, for example scrapping the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty from George Osborne. This administration should have abolished it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform along with the entire right-wing media have spent days barking about the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing hard workers to fund shirkers. Labour backbenchers are applauding her budget as balm to their troubled consciences, protecting the most vulnerable. Both sides are completely mistaken: Reeves's budget was largely aimed at asset managers, speculative capital and participants within the financial markets.

The government can make a strong case in its defence. The margins provided by the OBR were too small to feel secure, especially given that lenders demand from the UK the greatest borrowing cost of all G7 rich countries – higher than France, that recently lost its leader, and exceeding Japan which has way more debt. Combined with our policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan allows the Bank of England to reduce interest rates.

You can see that those wearing Labour badges might not frame it in such terms next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has effectively "weaponised" the bond market to act as an instrument of control over Labour MPs and the voters. It's the reason the chancellor cannot resign, regardless of which pledges are broken. It's why Labour MPs will have to fall into line and vote that cut billions from social security, as Starmer indicated yesterday.

Missing Statecraft , an Unfulfilled Pledge

What is absent from this is the notion of statecraft, of mobilising the finance ministry and the Bank to forge a new accommodation with investors. Missing too is any innate understanding of voters,