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This charge carries significant weight: that Rachel Reeves has lied to UK citizens, spooking them to accept billions in additional taxes that would be spent on increased welfare payments. While hyperbolic, this isn't typical Westminster bickering; on this occasion, the consequences could be damaging. A week ago, critics of Reeves alongside Keir Starmer were calling their budget "a shambles". Today, it's denounced as falsehoods, with Kemi Badenoch calling for Reeves to step down.

This serious accusation demands straightforward answers, so let me provide my view. Did the chancellor lied? Based on the available information, apparently not. There were no blatant falsehoods. However, despite Starmer's yesterday's remarks, that doesn't mean there's nothing to see and we can all move along. Reeves did mislead the public about the considerations shaping her choices. Was it to funnel cash to "welfare recipients", like the Tories assert? No, as the numbers demonstrate it.

A Standing Sustains Another Hit, But Facts Must Win Out

Reeves has taken another hit to her standing, but, should facts still matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the true narrative is far stranger compared to media reports indicate, and stretches wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is a story concerning how much say you and I get over the running of the nation. And it should worry you.

First, to Brass Tacks

When the OBR published last Friday a portion of the forecasts it shared with Reeves while she prepared the budget, the surprise was immediate. Not only has the OBR not acted this way before (an "unusual step"), its numbers apparently contradicted Reeves's statements. While rumors from Westminster were about the grim nature of the budget was going to be, the OBR's own forecasts were getting better.

Consider the Treasury's so-called "iron-clad" rule, stating by 2030 daily spending for hospitals, schools, and other services would be completely funded by taxes: in late October, the watchdog reckoned this would just about be met, albeit only by a minuscule margin.

Several days later, Reeves gave a press conference so extraordinary it forced morning television to break from its usual fare. Several weeks prior to the actual budget, the nation was put on alert: taxes were going up, and the main reason cited as gloomy numbers provided by the OBR, in particular its finding that the UK was less productive, putting more in but getting less out.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds suggested over the weekend, this is essentially what transpired at the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

Where Reeves misled us concerned her alibi, since those OBR forecasts didn't compel her actions. She might have chosen different options; she might have provided other reasons, including during the statement. Before the recent election, Starmer promised exactly such people power. "The promise of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it's powerlessness that is evident in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, facing the decisions that I face."

She certainly make a choice, only not one Labour wishes to publicize. From April 2029 British workers as well as businesses will be contributing an additional £26bn a year in tax – and the majority of this will not be funding improved healthcare, new libraries, or enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Cash Really Goes

Rather than being spent, more than 50% of this extra cash will in fact give Reeves a buffer for her self-imposed fiscal rules. About 25% is allocated to paying for the government's own policy reversals. Examining the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the taxes will fund genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. This administration should have abolished it immediately upon taking office.

The True Audience: The Bond Markets

Conservatives, Reform along with the entire Blue Pravda have spent days railing against the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing hard workers to spend on shirkers. Labour backbenchers have been cheering her budget for being balm to their troubled consciences, safeguarding the disadvantaged. Each group are completely mistaken: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and participants within the bond markets.

Downing Street can make a strong case for itself. The margins from the OBR were insufficient to feel secure, especially given that lenders demand from the UK the highest interest rate of all G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan which has way more debt. Combined with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan enables the Bank of England to cut interest rates.

You can see why those folk with red rosettes might not frame it in such terms when they're on #Labourdoorstep. According to a consultant to Downing Street puts it, Reeves has "utilised" financial markets to act as a tool of discipline over her own party and the electorate. This is the reason Reeves cannot resign, regardless of which pledges are broken. It's why Labour MPs will have to fall into line and support measures to take billions off social security, just as Starmer promised yesterday.

A Lack of Statecraft , a Broken Promise

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