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This charge is a serious one: that Rachel Reeves may have misled the British public, scaring them into accepting billions in extra taxes which could be used for higher benefits. While exaggerated, this isn't usual Westminster sparring; this time, the consequences are more serious. A week ago, critics of Reeves alongside Keir Starmer had been labeling their budget "chaotic". Today, it is branded as lies, and Kemi Badenoch calling for the chancellor to quit.

Such a serious charge demands clear responses, so let me provide my assessment. Has the chancellor tell lies? Based on the available information, apparently not. She told no blatant falsehoods. But, despite Starmer's yesterday's comments, that doesn't mean there's no issue here and we can all move along. The Chancellor did mislead the public regarding the factors shaping her decisions. Was it to funnel cash towards "benefits street", like the Tories claim? Certainly not, and the figures demonstrate this.

A Standing Sustains Another Hit, Yet Truth Should Prevail

Reeves has taken another hit to her standing, however, if facts continue to have anything to do with politics, Badenoch ought to stand down her lynch mob. Maybe the stepping down yesterday of OBR head, Richard Hughes, over the unauthorized release of its internal documents will quench SW1's appetite for scandal.

But the real story is much more unusual than media reports indicate, and stretches broader and deeper than the political futures of Starmer and the 2024 intake. At its heart, herein lies a story about how much say the public have over the governance of the nation. This should concern you.

First, to the Core Details

When the OBR released recently some of the forecasts it provided to Reeves while she wrote the red book, the surprise was instant. Not only has the OBR not acted this way before (described as an "unusual step"), its numbers apparently went against the chancellor's words. While leaks from Westminster were about how bleak the budget was going to be, the OBR's own predictions were getting better.

Consider the government's so-called "iron-clad" rule, that by 2030 daily spending on hospitals, schools, and other services must be completely funded by taxes: in late October, the watchdog reckoned it would just about be met, albeit only by a tiny margin.

Several days later, Reeves gave a press conference so unprecedented it forced morning television to break from its usual fare. Weeks prior to the real budget, the country was warned: taxes were going up, with the main reason being gloomy numbers from the OBR, specifically its finding that the UK had become less efficient, putting more in but yielding less.

And lo! It happened. Notwithstanding what Telegraph editorials combined with Tory media appearances suggested over the weekend, that is essentially what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

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

A year on, and it's powerlessness that is evident in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure buffeted by forces outside her influence: "In the context of the long-term challenges on our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She did make a choice, just not the kind the Labour party cares to broadcast. From April 2029 UK workers as well as businesses are set to be paying another £26bn annually in tax – and the majority of this will not go towards spent on improved healthcare, new libraries, or happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Money Really Goes

Instead of going on services, over 50% of this additional revenue will instead give Reeves cushion against her own budgetary constraints. Approximately 25% is allocated to paying for the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, a mere 17% of the tax take will fund genuinely additional spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been a bit of political theatre from George Osborne. This administration could and should have binned it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform and all of Blue Pravda have spent days railing against the idea that Reeves fits the stereotype of Labour chancellors, taxing strivers to spend on shirkers. Labour backbenchers are cheering her budget for being balm to their social concerns, safeguarding the disadvantaged. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily targeted towards asset managers, speculative capital and participants within the bond markets.

The government can make a compelling argument in its defence. The margins from the OBR were deemed insufficient for comfort, particularly considering lenders charge the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan which has far greater debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the Bank of England to reduce its key lending rate.

It's understandable why those wearing red rosettes might not couch it this way next time they're on the doorstep. As one independent adviser for Downing Street says, Reeves has "utilised" the bond market to act as an instrument of discipline over Labour MPs and the voters. This is why Reeves can't resign, no matter what promises are broken. It is also why Labour MPs must fall into line and support measures to take billions off social security, as Starmer indicated yesterday.

Missing Political Vision and an Unfulfilled Promise

What is absent from this is the notion of strategic governance, of harnessing the Treasury and the Bank to reach a fresh understanding with markets. Missing too is any innate understanding of voters,