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The accusation carries significant weight: suggesting Rachel Reeves has misled Britons, frightening them into accepting billions in extra taxes which could be used for increased welfare payments. While exaggerated, this isn't usual political sparring; on this occasion, the consequences are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer were labeling their budget "a mess". Today, it is branded as lies, and Kemi Badenoch demanding Reeves to step down.

This grave accusation demands clear responses, therefore let me provide my view. Has the chancellor been dishonest? On current evidence, no. She told no whoppers. But, notwithstanding Starmer's recent comments, that doesn't mean there's no issue here and we should move on. The Chancellor did misinform the public about the factors informing her choices. Was it to channel cash to "welfare recipients", as the Tories claim? No, and the numbers demonstrate it.

A Reputation Sustains A Further Hit, But Facts Must Prevail

The Chancellor has sustained a further blow to her reputation, but, if facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, over the leak of its internal documents will satisfy SW1's thirst for blood.

Yet the true narrative is much more unusual than the headlines indicate, extending broader and deeper than the political futures of Starmer and the 2024 intake. At its heart, herein lies an account concerning how much say the public have over the running of our own country. And it concern you.

Firstly, on to Brass Tacks

When the OBR published last Friday a portion of the projections it provided to Reeves as she prepared the red book, the surprise was instant. Not merely had the OBR not acted this way before (an "rare action"), its numbers apparently contradicted Reeves's statements. Even as rumors from Westminster were about the grim nature of the budget would have to be, the OBR's own predictions were getting better.

Consider the government's most "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest must be completely funded by taxes: in late October, the OBR reckoned this would barely be met, albeit only by a tiny margin.

Several days later, Reeves held a press conference so extraordinary that it caused morning television to interrupt its usual fare. Several weeks prior to the real budget, the country was put on alert: taxes were going up, and the main reason being pessimistic numbers provided by the OBR, in particular its conclusion suggesting the UK had become less productive, investing more but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances implied over the weekend, that is basically what happened at the budget, that proved to be big and painful and bleak.

The Deceptive Alibi

The way in which Reeves misled us was her alibi, because these OBR forecasts didn't force her hand. She could have chosen other choices; she could have provided alternative explanations, including on budget day itself. Prior to the recent election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, yet it's powerlessness 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 outside her influence: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any party would be standing here today, confronting the decisions that I face."

She certainly make a choice, only not the kind Labour wishes to broadcast. From April 2029 UK workers as well as businesses are set to be contributing an additional £26bn annually in tax – and the majority of this will not be funding improved healthcare, new libraries, or happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Cash Actually Ends Up

Instead of going on services, more than 50% of this extra cash will in fact give Reeves cushion against her own budgetary constraints. Approximately 25% is allocated to paying for the administration's U-turns. Examining the OBR's calculations and being as generous as possible towards a Labour chancellor, a mere 17% of the taxes will go on actual new spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, as it was always a bit of political theatre from George Osborne. This administration could and should abolished it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform along with the entire Blue Pravda have been railing against how Reeves fits the caricature of left-wing finance ministers, soaking strivers to fund the workshy. Party MPs are cheering her budget as a relief to their social concerns, safeguarding the most vulnerable. Each group could be completely mistaken: Reeves's budget was largely targeted towards asset managers, hedge funds and participants within the financial markets.

The government could present a strong case for itself. The forecasts from the OBR were deemed insufficient to feel secure, especially given that lenders charge the UK the highest interest rate of all G7 developed nations – higher than France, that recently lost a prime minister, higher than Japan which has far greater debt. Combined with our measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan enables the central bank to reduce interest rates.

You can see why those wearing red rosettes might not frame it this way next time they're on the doorstep. According to one independent adviser for Downing Street says, Reeves has effectively "weaponised" financial markets to act as an instrument of discipline over her own party and the voters. It's the reason Reeves cannot resign, regardless of which promises she breaks. It is also the reason Labour MPs will have to knuckle down and vote that cut billions from social security, just as Starmer indicated recently.

Missing Political Vision and a Broken Promise

What's missing from this is the notion of strategic governance, of mobilising the Treasury and the Bank to reach a fresh understanding with investors. Missing too is innate understanding of voters,