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The charge represents a grave matter: that Rachel Reeves may have lied to the British public, spooking them into accepting massive extra taxes which would be spent on higher benefits. While exaggerated, this isn't typical political sparring; on this occasion, the consequences could be damaging. A week ago, critics aimed at Reeves and Keir Starmer had been calling their budget "a mess". Now, it's denounced as lies, with Kemi Badenoch demanding the chancellor's resignation.

Such a grave accusation requires clear answers, therefore here is my assessment. Has the chancellor tell lies? On current evidence, apparently not. There were no blatant falsehoods. However, notwithstanding Starmer's recent remarks, it doesn't follow that there is no issue here and we can all move along. The Chancellor did misinform the public regarding the considerations informing her decisions. Was this all to funnel cash to "welfare recipients", like the Tories claim? No, as the figures prove this.

A Standing Takes Another Blow, Yet Truth Should Win Out

The Chancellor has sustained another hit to her reputation, but, if facts still matter in politics, Badenoch ought to stand down her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's appetite for scandal.

But the real story is far stranger than the headlines suggest, and stretches wider and further beyond the careers of Starmer and the class of '24. Fundamentally, herein lies a story concerning what degree of influence the public get over the governance of the nation. This should concern everyone.

First, to the Core Details

When the OBR released last Friday a portion of the forecasts it shared with Reeves as she wrote the budget, the surprise was immediate. Not only has the OBR not done such a thing before (an "unusual step"), its numbers apparently went against the chancellor's words. Even as leaks from Westminster suggested how bleak the budget would have to be, the OBR's own forecasts were improving.

Consider the government's most "unbreakable" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be wholly funded by taxes: in late October, the OBR reckoned it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to interrupt its regular schedule. Several weeks before the actual budget, the nation was put on alert: taxes were going up, and the primary cause being gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK was less efficient, putting more in but yielding less.

And lo! It came to pass. Despite what Telegraph editorials and Tory media appearances suggested recently, that is essentially 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 alibi, because those OBR forecasts did not compel her actions. She could have made other choices; she might have given alternative explanations, including on budget day itself. Prior to last year's election, Starmer promised exactly such people power. "The promise of democracy. The power of the vote. The potential for national renewal."

One year later, yet it's powerlessness that is evident in Reeves's breakfast speech. The first Labour chancellor in 15 years portrays herself as a technocrat at the mercy of forces outside her influence: "In the context of the long-term challenges on our productivity … any finance minister of any party would be standing here today, confronting the choices that I face."

She certainly make a choice, only not one Labour cares to broadcast. Starting April 2029 British workers as well as businesses will be contributing another £26bn a year in taxes – and the majority of this will not go towards funding better hospitals, new libraries, nor enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Really Goes

Rather than going on services, over 50% of this extra cash will in fact provide Reeves a buffer for her own fiscal rules. About 25% is allocated to paying for the government's own U-turns. Reviewing the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the taxes will fund genuinely additional spending, such as abolishing the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. This administration could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform and all of right-wing media have spent days barking about how Reeves conforms to the stereotype of left-wing finance ministers, soaking strivers to fund shirkers. Party MPs have been cheering her budget as balm for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was largely aimed at investment funds, hedge funds and participants within the financial markets.

Downing Street can make a compelling argument in its defence. The margins from the OBR were deemed insufficient to feel secure, especially considering bond investors charge the UK the highest interest rate among G7 rich countries – higher than France, that recently lost its leader, higher than Japan which has far greater debt. Coupled with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget allows the Bank of England to cut its key lending rate.

You can see that those wearing Labour badges might not frame it in such terms next time they're on the doorstep. According to one independent adviser to Downing Street says, Reeves has "utilised" financial markets as a tool of control against her own party and the voters. This is why Reeves cannot resign, regardless of which pledges are broken. It's why Labour MPs will have to knuckle down and vote to take billions off social security, just as Starmer promised recently.

A Lack of Statecraft and a Broken Pledge

What's missing here is the notion of statecraft, of harnessing the finance ministry and the central bank to forge a fresh understanding with markets. Also absent is any intuitive knowledge of voters,