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This accusation represents a grave matter: that Rachel Reeves may have lied to Britons, frightening them into accepting massive additional taxes that would be used for increased welfare payments. While hyperbolic, this is not usual Westminster sparring; this time, the consequences could be damaging. A week ago, critics aimed at Reeves alongside Keir Starmer were calling their budget "a mess". Now, it's branded as lies, and Kemi Badenoch calling for Reeves to step down.

Such a serious accusation demands clear responses, therefore here is my assessment. Did the chancellor tell lies? On the available information, apparently not. There were no whoppers. But, despite Starmer's yesterday's comments, that doesn't mean there's no issue here and we should move on. The Chancellor did mislead the public about the factors informing her decisions. Was it to channel cash towards "welfare recipients", like the Tories claim? Certainly not, as the figures demonstrate it.

A Reputation Takes Another Hit, But Facts Should Prevail

The Chancellor has sustained a further blow to her reputation, but, if facts continue to have anything to do with politics, Badenoch should stand down her lynch mob. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's appetite for scandal.

Yet the true narrative is much more unusual than media reports suggest, and stretches wider and further beyond the careers of Starmer and his class of '24. Fundamentally, herein lies an account about what degree of influence you and I have over the governance of the nation. This should concern everyone.

Firstly, to Brass Tacks

When the OBR published last Friday some of the projections it shared with Reeves while she prepared the red book, the surprise was immediate. Not only had the OBR not done such a thing before (described as an "exceptional move"), its numbers apparently contradicted Reeves's statements. While rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were improving.

Consider the government's most "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services must be wholly paid for by taxes: at the end of October, the watchdog calculated this would barely be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented that it caused breakfast TV to break from its regular schedule. Several weeks before the real budget, the country was warned: taxes would rise, with the primary cause being pessimistic numbers from the OBR, in particular its finding suggesting the UK had become less productive, investing more but getting less out.

And so! It came to pass. Despite what Telegraph editorials combined with Tory media appearances suggested recently, that is basically what happened during the budget, which was big and painful and bleak.

The Deceptive Alibi

Where Reeves misled us concerned her alibi, since these OBR forecasts did not force her hand. She could have made other choices; she could have given alternative explanations, including during the statement. Prior to last year's election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

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

She certainly make decisions, just not the kind the Labour party wishes to publicize. From April 2029 British workers as well as businesses are set to be contributing an additional £26bn a year in taxes – but the majority of this will not be funding better hospitals, public services, nor happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Cash Really Goes

Rather than going on services, over 50% of this additional revenue will in fact give Reeves cushion for her own fiscal rules. About 25% goes on covering the government's own policy reversals. Examining the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the tax take will go on genuinely additional spending, such as abolishing the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, because it had long been a bit of theatrical cruelty from George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform along with all of right-wing media have been railing against the idea that Reeves conforms to the caricature of Labour chancellors, soaking strivers to spend on shirkers. Party MPs are cheering her budget as a relief to their troubled consciences, protecting the disadvantaged. Each group are completely mistaken: The Chancellor's budget was largely targeted towards investment funds, speculative capital and the others in the financial markets.

Downing Street can make a compelling argument for itself. The margins from the OBR were deemed insufficient for comfort, especially given that bond investors demand from the UK the highest interest rate among G7 rich countries – higher than France, that recently lost a prime minister, and exceeding Japan which has far greater debt. Coupled with the policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the Bank of England to cut its key lending rate.

It's understandable why those folk with Labour badges might not frame it this way next time they're on #Labourdoorstep. As a consultant to Downing Street puts it, Reeves has effectively "utilised" the bond market to act as a tool of control over her own party and the voters. This is why the chancellor can't resign, no matter what pledges she breaks. It is also why Labour MPs will have to knuckle down and support measures to take billions off social security, just as Starmer indicated recently.

Missing Political Vision , an Unfulfilled Promise

What's missing from this is the notion of statecraft, of mobilising the Treasury and the Bank to reach a new accommodation with markets. Missing too is any innate understanding of voters,