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This accusation is a serious one: suggesting Rachel Reeves has misled the British public, spooking them into accepting massive additional taxes which would be used for increased benefits. While exaggerated, this isn't typical political bickering; on this occasion, the consequences are higher. Just last week, critics of Reeves and Keir Starmer were labeling their budget "a shambles". Now, it's branded as falsehoods, and Kemi Badenoch calling for Reeves to step down.

This serious accusation requires straightforward answers, so let me provide my assessment. Has the chancellor lied? On current evidence, no. She told no major untruths. But, despite Starmer's yesterday's comments, that doesn't mean there is no issue here and we can all move along. Reeves did mislead the public regarding the considerations shaping her decisions. Was this all to channel cash towards "benefits street", like the Tories claim? Certainly not, and the figures prove it.

A Reputation Sustains Another Hit, Yet Truth Must Win Out

The Chancellor has taken another hit to her reputation, however, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the stepping down recently of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

But the true narrative is much more unusual than media reports indicate, and stretches broader and deeper than the careers of Starmer and his class of '24. At its heart, herein lies an account about how much say the public get in the running of the nation. And it should worry everyone.

Firstly, to the Core Details

After the OBR published recently some of the projections it provided to Reeves as she prepared the budget, the surprise was instant. Not merely has the OBR not done such a thing before (described as an "rare action"), its numbers seemingly went against Reeves's statements. While rumors from Westminster suggested the grim nature of the budget was going to be, the OBR's own forecasts were getting better.

Take the government's so-called "iron-clad" rule, stating by 2030 day-to-day spending for hospitals, schools, and other services would be completely funded by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented it forced morning television to interrupt its usual fare. Several weeks prior to the actual budget, the nation was put on alert: taxes would rise, with the main reason being gloomy numbers from the OBR, specifically its conclusion that the UK was less productive, putting more in but getting less out.

And so! It happened. Notwithstanding what Telegraph editorials and Tory media appearances suggested recently, that is essentially what happened at the budget, that proved to be significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves deceived us concerned her justification, since those OBR forecasts did not compel her actions. She might have made other choices; she might have provided alternative explanations, including during the statement. Before last year's election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, and it's powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself as a technocrat at the mercy of factors beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any party would be standing here today, confronting the decisions that I face."

She certainly make decisions, just not one Labour wishes to publicize. Starting April 2029 UK workers as well as businesses will be contributing another £26bn annually in tax – but the majority of this will not be spent on improved healthcare, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Money Actually Ends Up

Instead of going on services, more than 50% of the additional revenue will in fact provide Reeves a buffer for her own fiscal rules. Approximately 25% goes on covering the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible to Reeves, a mere 17% of the tax take will go on actual new spending, such as abolishing the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it was always a bit of theatrical cruelty from George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with all of right-wing media have spent days barking about the idea that Reeves conforms to the caricature of Labour chancellors, soaking hard workers to spend on shirkers. Party MPs are applauding her budget as a relief for their social concerns, protecting the disadvantaged. Each group are 180-degrees wrong: Reeves's budget was primarily targeted towards asset managers, speculative capital and the others in the financial markets.

The government can make a compelling argument 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 rich countries – higher than France, which lost its leader, and exceeding Japan which has far greater debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the central bank to reduce its key lending rate.

It's understandable why those wearing red rosettes may choose not to frame it this way next time they're on #Labourdoorstep. According to a consultant to Downing Street says, Reeves has "weaponised" financial markets as an instrument of discipline over Labour MPs and the electorate. It's the reason the chancellor cannot resign, no matter what promises are broken. It is also why Labour MPs must knuckle down and support measures to take billions off social security, as Starmer promised recently.

Missing Statecraft and an Unfulfilled Pledge

What is absent from this is any sense of strategic governance, of harnessing the Treasury and the central bank to forge a fresh understanding with markets. Missing too is innate understanding of voters,