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The allegation is a serious one: that Rachel Reeves has deceived UK citizens, scaring them into accepting billions in additional taxes which could be spent on increased welfare payments. While hyperbolic, this is not usual political bickering; this time, the stakes are more serious. Just last week, detractors aimed at Reeves and Keir Starmer were labeling their budget "disorderly". Today, it's denounced as lies, and Kemi Badenoch demanding Reeves to step down.

Such a grave charge requires clear responses, so let me provide my assessment. Did the chancellor tell lies? Based on the available evidence, no. She told no major untruths. But, despite Starmer's recent comments, that doesn't mean there's no issue here and we should move on. Reeves did mislead the public regarding the considerations shaping her choices. Was it to funnel cash towards "welfare recipients", as the Tories claim? Certainly not, as the figures prove it.

A Standing Takes Another Hit, Yet Truth Must Win Out

Reeves has sustained another blow to her reputation, however, should facts still have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the resignation yesterday of OBR head, Richard Hughes, due to the leak of its own documents will satisfy SW1's appetite for scandal.

Yet the true narrative is far stranger compared to the headlines indicate, and stretches broader and deeper than the careers of Starmer and his 2024 intake. At its heart, herein lies a story about how much say you and I get in the governance of the nation. And it should worry everyone.

First, to Brass Tacks

When the OBR released last Friday some of the forecasts it shared with Reeves as she prepared the budget, the surprise was immediate. Not merely has the OBR never done such a thing before (an "exceptional move"), its numbers apparently contradicted the chancellor's words. Even as leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

Take the Treasury's most "unbreakable" fiscal rule, stating by 2030 daily spending for hospitals, schools, and the rest would be wholly paid for by taxes: at the end of October, the watchdog reckoned it would barely be met, albeit only by a tiny margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to break from its usual fare. Several weeks before the actual budget, the country was warned: taxes were going up, with the main reason being gloomy numbers provided by the OBR, specifically its finding suggesting the UK had become less efficient, investing more but yielding less.

And so! It happened. Despite what Telegraph editorials and Tory broadcast rounds implied over the weekend, that is basically what transpired at the budget, which was significant, harsh, and grim.

The Deceptive Justification

Where Reeves misled us was her justification, since those OBR forecasts did not compel her actions. She might have chosen other choices; she could have given other reasons, including during the statement. Before last year's election, Starmer pledged precisely this kind of people power. "The promise of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it's powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be a technocrat buffeted by forces beyond her control: "In the context of the long-term challenges on our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, just not one Labour cares to broadcast. From April 2029 British workers and businesses will be contributing another £26bn annually in tax – and most of that will not be spent on improved healthcare, new libraries, nor enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of this additional revenue will in fact give Reeves cushion for her self-imposed fiscal rules. About 25% goes on paying for the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the taxes will fund actual new spending, such as abolishing the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it had long been an act of theatrical cruelty from George Osborne. A Labour government should have abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform and all of Blue Pravda have spent days railing against the idea that Reeves fits the caricature of Labour chancellors, taxing hard workers to fund the workshy. Labour backbenchers have been cheering her budget for being balm to their social concerns, protecting the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was primarily targeted towards asset managers, hedge funds and the others in the bond markets.

Downing Street can make a compelling argument in its defence. The forecasts provided by the OBR were too small to feel secure, particularly considering lenders demand from the UK the greatest borrowing cost of all G7 developed nations – exceeding that of 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 together with Reeves can say their plan enables the central bank to cut interest rates.

You can see that those wearing red rosettes may choose not to couch it in such terms next time they visit the doorstep. According to one independent adviser to Downing Street puts it, Reeves has effectively "weaponised" the bond market as a tool of control over Labour MPs and the voters. This is the reason the chancellor cannot resign, no matter what promises are broken. It is also why Labour MPs must knuckle down and support measures to take billions off social security, as Starmer promised yesterday.

Missing Political Vision , an Unfulfilled Promise

What is absent here is the notion of statecraft, of harnessing the Treasury and the Bank to reach a fresh understanding with markets. Missing too is innate understanding of voters,