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The accusation is a serious one: suggesting Rachel Reeves may have deceived the British public, spooking them to accept massive extra taxes that would be spent on increased welfare payments. However hyperbolic, this isn't typical political sparring; on this occasion, the consequences are more serious. Just last week, critics of Reeves alongside Keir Starmer had been calling their budget "a mess". Today, it is denounced as falsehoods, with Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge requires clear answers, so let me provide my assessment. Has the chancellor been dishonest? On current evidence, apparently not. There were no blatant falsehoods. But, despite Starmer's recent remarks, that doesn't mean there's nothing to see and we should move on. Reeves did misinform the public regarding the considerations informing her choices. Was it to funnel cash towards "welfare recipients", as the Tories assert? Certainly not, and the numbers demonstrate this.

A Reputation Sustains A Further Blow, But Facts Should Prevail

The Chancellor has taken another blow to her standing, but, should facts continue to matter in politics, Badenoch should stand down her lynch mob. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will quench SW1's appetite for scandal.

Yet the true narrative is far stranger than media reports indicate, extending wider and further than the political futures of Starmer and his class of '24. At its heart, herein lies an account concerning what degree of influence you and I have over the governance of the nation. This should should worry you.

Firstly, on to Brass Tacks

After the OBR released last Friday some of the projections it shared with Reeves as she wrote the red book, the shock was instant. Not only had the OBR not acted this way before (described as an "exceptional move"), its figures apparently went against Reeves's statements. Even as leaks from Westminster suggested how bleak the budget was going to be, the watchdog's predictions were getting better.

Consider the Treasury's most "unbreakable" fiscal rule, that by 2030 daily spending for hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit by a tiny margin.

Several days later, Reeves held a press conference so unprecedented it forced breakfast TV to break from its usual fare. Weeks before the actual budget, the country was warned: taxes would rise, and the main reason cited as gloomy numbers from the OBR, in particular its finding suggesting the UK was less productive, investing more but yielding less.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory media appearances suggested recently, this is basically what happened during the budget, which was significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves deceived us concerned her justification, because these OBR forecasts did not compel her actions. She might have made different options; she could have provided other reasons, even during the statement. Prior to the recent election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it's powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself to be a technocrat at the mercy of forces outside her influence: "In the context of the persistent challenges with our productivity … any chancellor of any party would be standing here today, confronting the choices that I face."

She certainly make decisions, just not one the Labour party cares to publicize. From April 2029 British workers and businesses will be contributing an additional £26bn annually in tax – and the majority of this will not go towards funding improved healthcare, new libraries, or happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of this additional revenue will instead give Reeves cushion for her self-imposed fiscal rules. About 25% is allocated to covering the government's own policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, a mere 17% of the tax take will go on actual new spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been a bit of theatrical cruelty by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform along with all of Blue Pravda have spent days barking about the idea that Reeves fits the caricature of Labour chancellors, taxing hard workers to spend on shirkers. Party MPs have been applauding her budget as balm to their troubled consciences, safeguarding the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was largely targeted towards investment funds, hedge funds and the others in the financial markets.

The government could present a strong case for itself. The forecasts provided by the OBR were deemed too small to feel secure, particularly considering lenders charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, which lost its leader, and exceeding Japan which has far greater debt. Combined with our measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue their plan allows the Bank of England to reduce interest rates.

You can see that those wearing Labour badges may choose not to couch it this way next time they visit #Labourdoorstep. According to one independent adviser for Downing Street puts it, Reeves has "weaponised" financial markets to act as a tool of discipline against Labour MPs and the electorate. It's the reason the chancellor cannot resign, regardless of which pledges are broken. It is also the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer promised recently.

Missing Statecraft , a Broken Pledge

What's missing from this is the notion of strategic governance, of harnessing the Treasury and the central bank to reach a fresh understanding with investors. Also absent is any innate understanding of voters,