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The accusation carries significant weight: suggesting Rachel Reeves has lied to the British public, spooking them into accepting billions in additional taxes which would be spent on higher welfare payments. While exaggerated, this is not usual Westminster bickering; this time, the stakes are higher. A week ago, critics of Reeves alongside Keir Starmer had been labeling their budget "a mess". Today, it's denounced as lies, and Kemi Badenoch calling for the chancellor to quit.

Such a serious accusation requires clear answers, so here is my view. Has the chancellor tell lies? On current information, apparently not. She told no blatant falsehoods. But, despite Starmer's recent comments, it doesn't follow that there is no issue here and we can all move along. Reeves did mislead the public about the factors shaping her decisions. Was it to channel cash towards "welfare recipients", as the Tories claim? Certainly not, as the figures demonstrate this.

A Standing Takes A Further Hit, But Facts Should Win Out

Reeves has sustained a further hit to her reputation, but, if facts still matter in politics, Badenoch ought to stand down her lynch mob. Maybe the stepping down recently of OBR head, Richard Hughes, over the leak of its internal documents will quench Westminster's thirst for blood.

Yet the real story is much more unusual than media reports suggest, extending wider and further than the careers of Starmer and the 2024 intake. Fundamentally, herein lies a story concerning what degree of influence the public get over the running of our own country. And it concern you.

Firstly, to Brass Tacks

After the OBR released recently some of the forecasts it shared with Reeves while she prepared the red book, the surprise was instant. Not merely has the OBR not acted this way before (an "exceptional move"), its numbers seemingly went against the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Consider the Treasury's so-called "unbreakable" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest would be wholly funded by taxes: in late October, the OBR reckoned it 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 usual fare. Several weeks before the actual budget, the nation was put on alert: taxes were going up, and the primary cause cited as gloomy numbers provided by the OBR, specifically its conclusion that the UK was less productive, investing more but getting less out.

And so! It happened. Notwithstanding the implications from Telegraph editorials and Tory media appearances suggested over the weekend, that is essentially what happened at the budget, which was big and painful and bleak.

The Deceptive Justification

Where Reeves misled us was her alibi, because these OBR forecasts didn't force her hand. She could have chosen different options; she might have given alternative explanations, including on budget day itself. Prior to the recent election, Starmer promised exactly such people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it's a lack of agency that is evident from Reeves's breakfast speech. The first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by 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, confronting the decisions that I face."

She certainly make decisions, just not one Labour cares to publicize. Starting April 2029 British workers and businesses are set to be paying an additional £26bn a year in taxes – but most of that will not go towards funding improved healthcare, public services, nor enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of going on services, over 50% of this extra cash will instead give Reeves a buffer against her own budgetary constraints. About 25% is allocated to covering the administration's policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the tax take will fund actual new spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, because it had long been a bit of political theatre from George Osborne. This administration could and should abolished it in its first 100 days.

The Real Target: The Bond Markets

Conservatives, Reform along with the entire right-wing media have spent days railing against the idea that Reeves fits the stereotype of Labour chancellors, soaking strivers to fund shirkers. Labour backbenchers have been applauding her budget as a relief to their social concerns, safeguarding the disadvantaged. Each group could be completely mistaken: The Chancellor's budget was largely targeted towards investment funds, speculative capital and participants within the financial markets.

Downing Street can make a compelling argument in its defence. The forecasts from the OBR were insufficient to feel secure, especially given that bond investors demand from the UK the greatest borrowing cost of all G7 developed nations – higher than France, which lost a prime minister, higher than Japan that carries way more debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget enables the Bank of England to reduce interest rates.

You can see that those folk with Labour badges might not frame it in such terms next time they visit #Labourdoorstep. As one independent adviser for Downing Street puts it, Reeves has effectively "utilised" the bond market to act as a tool of control against Labour MPs and the voters. It's the reason the chancellor can't resign, regardless of which pledges she breaks. It's the reason Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer promised recently.

A Lack of Political Vision and an Unfulfilled Promise

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