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This charge represents a grave matter: suggesting Rachel Reeves has deceived UK citizens, frightening them into accepting massive additional taxes which could be used for increased welfare payments. While hyperbolic, this isn't typical political sparring; on this occasion, the stakes are higher. A week ago, detractors aimed at Reeves alongside Keir Starmer were calling their budget "uncoordinated". Today, it's denounced as lies, and Kemi Badenoch demanding Reeves to step down.

This serious charge demands straightforward responses, therefore let me provide my assessment. Did the chancellor lied? On the available evidence, apparently not. She told no major untruths. But, notwithstanding Starmer's yesterday's comments, that doesn't mean there's nothing to see and we can all move along. The Chancellor did misinform the public regarding the factors shaping her choices. Was it to funnel cash towards "benefits street", as the Tories assert? No, and the figures demonstrate this.

A Standing Sustains Another Blow, But Facts Must Win Out

The Chancellor has sustained a further hit to her standing, but, if facts continue to matter in politics, Badenoch ought to call off her attack dogs. 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.

Yet the true narrative is much more unusual than media reports suggest, extending wider and further than the careers of Starmer and his class of '24. At its heart, this is a story concerning what degree of influence you and I have in the running of our own country. And it should worry everyone.

Firstly, on to Brass Tacks

After the OBR published recently some of the projections it shared with Reeves while she wrote the budget, the shock was immediate. Not only had the OBR never acted this way before (described as an "rare action"), its figures seemingly went against Reeves's statements. Even as leaks from Westminster were about how bleak the budget was going to be, the OBR's own forecasts were getting better.

Consider the Treasury's so-called "iron-clad" fiscal rule, that by 2030 daily spending for hospitals, schools, and the rest would be wholly paid for by taxes: in late October, the OBR reckoned this would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so unprecedented it forced breakfast TV to break from its usual fare. Several weeks before the actual budget, the nation was warned: taxes would rise, with the main reason cited as gloomy numbers from the OBR, in particular its conclusion that the UK was less productive, investing more but yielding less.

And lo! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances implied recently, this is essentially what transpired at the budget, that proved to be big and painful and bleak.

The Misleading Alibi

Where Reeves deceived us concerned her alibi, since these OBR forecasts didn't compel her actions. She could have chosen other choices; she could have provided other reasons, including during the statement. Before last year's election, Starmer promised precisely this kind of public influence. "The hope of democracy. The strength 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 buffeted by forces outside her influence: "In the context of the long-term challenges with our productivity … any finance minister of any party would be standing here today, confronting the choices that I face."

She did make decisions, just not the kind the Labour party wishes to broadcast. Starting April 2029 British workers and businesses will be paying an additional £26bn a year in taxes – but most of that will not be funding better hospitals, new libraries, or happier lives. Whatever bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Money Really Goes

Rather than being spent, over 50% of this additional revenue will in fact provide Reeves cushion against her self-imposed fiscal rules. About 25% goes on paying for the government's own U-turns. Reviewing the watchdog's figures and being as generous as possible to Reeves, a mere 17% of the tax take will fund actual new spending, for example scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. This administration should have abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform and all of right-wing media have spent days railing against the idea that Reeves fits the caricature of Labour chancellors, taxing hard workers to spend on shirkers. Labour backbenchers have been cheering her budget for being a relief to their troubled consciences, safeguarding the disadvantaged. Each group are completely mistaken: Reeves's budget was primarily aimed at investment funds, hedge funds and the others in the bond markets.

The government can make a strong case in its defence. The forecasts provided by the OBR were insufficient to feel secure, particularly considering lenders demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost its leader, higher than Japan that carries way more debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue this budget enables the Bank of England to reduce interest rates.

You can see why those folk with Labour badges might not couch it in such terms when they visit #Labourdoorstep. According to a consultant to Downing Street says, Reeves has "weaponised" financial markets as an instrument of control over her own party and the voters. It's the reason the chancellor can't resign, no matter what pledges are broken. It's the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer indicated yesterday.

A Lack of Statecraft and an Unfulfilled Pledge

What's missing here is the notion of strategic governance, of harnessing the Treasury and the central bank to reach a fresh understanding with investors. Also absent is any intuitive knowledge of voters,