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This allegation represents a grave matter: suggesting Rachel Reeves has misled UK citizens, frightening them to accept massive additional taxes that would be funneled into higher welfare payments. However exaggerated, this is not typical political bickering; this time, the stakes could be damaging. Just last week, detractors aimed at Reeves and Keir Starmer were calling their budget "uncoordinated". Today, it is denounced as lies, and Kemi Badenoch demanding Reeves to step down.

Such a serious charge demands clear answers, so here is my assessment. Has the chancellor tell lies? On the available information, apparently not. There were no whoppers. But, despite Starmer's recent comments, that doesn't mean there is no issue here and we can all move along. The Chancellor did misinform the public about the factors informing her decisions. Was this all to funnel cash towards "welfare recipients", as the Tories assert? Certainly not, as the figures prove it.

A Standing Takes Another Hit, Yet Truth Must Win Out

Reeves has sustained a further blow to her standing, however, if facts continue to matter in politics, Badenoch ought to stand down her attack dogs. Perhaps the stepping down yesterday of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

But the true narrative is much more unusual than media reports indicate, and stretches wider and further beyond the political futures of Starmer and his 2024 intake. At its heart, this is a story about what degree of influence the public have over the governance of the nation. And it should worry you.

First, on to the Core Details

When the OBR released recently some of the forecasts it provided to Reeves as she wrote the red book, the shock was instant. Not merely has the OBR not done such a thing before (an "rare action"), its figures seemingly contradicted the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the OBR's own predictions were improving.

Consider the Treasury's most "unbreakable" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest would be wholly paid for by taxes: in late October, the OBR reckoned it would just about be met, albeit only 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 prior to the real budget, the country was put on alert: taxes would rise, and the main reason being gloomy numbers from the OBR, in particular its conclusion that the UK was less productive, putting more in but getting less out.

And so! It came to pass. Despite what Telegraph editorials and Tory media appearances implied recently, this is basically what transpired during the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us was her justification, since those OBR forecasts did not compel her actions. She might have chosen other choices; she might have provided other reasons, including on budget day itself. Before the recent election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The potential 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 casts herself to be a technocrat buffeted by forces beyond her control: "In the context of the persistent challenges on our productivity … any finance minister of any party would be standing here today, confronting the choices that I face."

She certainly make decisions, just not the kind Labour wishes to publicize. From April 2029 British workers as well as businesses are set to be contributing an additional £26bn annually in taxes – but most of that will not go towards funding better hospitals, new libraries, or happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of the extra cash will in fact provide Reeves a buffer for her self-imposed budgetary constraints. Approximately 25% is allocated to paying for the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to Reeves, only 17% of the tax take will fund actual new spending, for example scrapping the limit on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always an act of political theatre from George Osborne. This administration could and should abolished it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have spent days railing against how Reeves conforms to the caricature of left-wing finance ministers, soaking strivers to spend on the workshy. Labour backbenchers have been applauding her budget for being a relief for their troubled consciences, safeguarding the most vulnerable. Each group are completely mistaken: The Chancellor's budget was primarily aimed at investment funds, hedge funds and participants within the bond markets.

Downing Street can make a compelling argument in its defence. The forecasts from the OBR were deemed insufficient for comfort, particularly considering lenders demand from the UK the greatest borrowing cost of all G7 rich countries – higher than France, that recently lost a prime minister, higher than Japan that carries way more debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan allows the central bank to reduce its key lending rate.

You can see that those folk with red rosettes might not frame it this way next time they visit the doorstep. According to one independent adviser for Downing Street puts it, Reeves has effectively "weaponised" financial markets to act as a tool of control against her own party and the electorate. It's why Reeves can't resign, regardless of which pledges are broken. It's the reason Labour MPs will have to fall into line and vote to take billions off social security, as Starmer indicated yesterday.

A Lack of Political Vision , an Unfulfilled Pledge

What's missing here is the notion of strategic governance, of mobilising the Treasury and the central bank to reach a new accommodation with investors. Missing too is innate understanding of voters,