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This allegation carries significant weight: that Rachel Reeves has lied to UK citizens, scaring them to accept massive extra taxes which would be used for increased benefits. While hyperbolic, this is not usual Westminster sparring; this time, the stakes are more serious. Just last week, detractors aimed at Reeves alongside Keir Starmer had been calling their budget "uncoordinated". Now, it is denounced as falsehoods, with Kemi Badenoch calling for the chancellor's resignation.

Such a serious charge requires straightforward responses, therefore here is my view. Did the chancellor been dishonest? On current evidence, no. She told no blatant falsehoods. However, despite Starmer's recent remarks, it doesn't follow that there is nothing to see and we should move on. Reeves did mislead the public about the factors shaping her decisions. Was this all to channel cash to "benefits street", as the Tories assert? No, and the numbers demonstrate this.

A Standing Takes Another Hit, But Facts Must Win Out

The Chancellor has sustained a further blow to her standing, however, should facts continue to have anything to do with politics, Badenoch ought to stand down her attack dogs. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the true narrative is far stranger than the headlines indicate, extending wider and further beyond the political futures of Starmer and the class of '24. At its heart, this is a story concerning what degree of influence you and I have in the governance of the nation. This should concern everyone.

First, to Brass Tacks

After the OBR released last Friday some of the projections it provided to Reeves as she wrote the red book, the surprise was immediate. Not only had the OBR never done such a thing before (described as an "unusual step"), its numbers seemingly contradicted the chancellor's words. While rumors from Westminster were about how bleak the budget was going to be, the watchdog's predictions were improving.

Take the government's so-called "unbreakable" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services would be completely funded by taxes: at the end of October, the OBR calculated it would barely be met, albeit only by a tiny margin.

Several days later, Reeves held a media briefing so unprecedented it forced morning television to break from its usual fare. Weeks prior to the actual budget, the country was warned: taxes would rise, with the main reason cited as pessimistic numbers provided by the OBR, in particular its finding that the UK had become less productive, investing more but getting less out.

And so! It came to pass. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested recently, this is basically what happened during the budget, that proved to be significant, harsh, and grim.

The Deceptive Alibi

The way in which Reeves misled us was her justification, since those OBR forecasts did not force her hand. She might have chosen different options; she might have provided alternative explanations, even during the statement. Before last year's election, Starmer pledged precisely this kind of people power. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, and it is powerlessness that is evident in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any political stripe would be in this position today, facing the decisions that I face."

She did make decisions, only not one the Labour party wishes to broadcast. Starting April 2029 UK workers and businesses are set to be contributing an additional £26bn annually in taxes – and the majority of this will not go towards spent on improved healthcare, new libraries, or enhanced wellbeing. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of going on services, more than 50% of this additional revenue will in fact provide Reeves a buffer for her own fiscal rules. About 25% is allocated to paying for the administration's U-turns. Examining 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 scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been an act of theatrical cruelty by George Osborne. This administration could and should have binned it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have spent days railing against how Reeves fits the caricature of left-wing finance ministers, taxing strivers to fund shirkers. Labour backbenchers are cheering her budget as a relief for their troubled consciences, protecting the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and participants within the bond markets.

Downing Street could present a compelling argument in its defence. The forecasts from the OBR were deemed too small to feel secure, especially given that bond investors demand from the UK the highest interest rate of all G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan that carries far greater debt. Coupled with the measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan enables the central bank to cut interest rates.

It's understandable that those folk with red rosettes may choose not to couch it this way when they're on #Labourdoorstep. According to a consultant for Downing Street says, Reeves has "utilised" the bond market to act as an instrument of discipline against her own party and the voters. It's why Reeves can't resign, regardless of which pledges are broken. It's why Labour MPs must fall into line and support measures to take billions off social security, just as Starmer promised recently.

A Lack of Statecraft and a Broken Promise

What is absent here is any sense of statecraft, of mobilising the Treasury and the Bank to reach a fresh understanding with investors. Missing too is any intuitive knowledge of voters,