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The allegation is a serious one: suggesting Rachel Reeves has lied to Britons, scaring them into accepting massive additional taxes which would be used for increased benefits. While exaggerated, this isn't usual political sparring; on this occasion, the consequences are higher. A week ago, critics of Reeves and Keir Starmer were labeling their budget "chaotic". Today, it's denounced as lies, and Kemi Badenoch demanding Reeves to step down.

This grave accusation demands clear answers, so let me provide my assessment. Did the chancellor lied? Based on the available evidence, no. She told no major untruths. However, notwithstanding Starmer's yesterday's remarks, that doesn't mean there is no issue here and we can all move along. Reeves did misinform the public regarding the considerations shaping her choices. Was this all to funnel cash to "benefits street", like the Tories claim? Certainly not, as the figures demonstrate it.

A Reputation Sustains A Further Hit, But Facts Must Prevail

Reeves has sustained another hit to her reputation, however, if facts still have anything to do with politics, Badenoch should 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 Westminster's appetite for scandal.

But the true narrative is far stranger than media reports indicate, extending wider and further beyond the careers of Starmer and his 2024 intake. Fundamentally, herein lies a story concerning what degree of influence you and I get in the running of our own country. And it concern you.

Firstly, on to Brass Tacks

When the OBR published recently some of the projections it provided to Reeves as she prepared the red book, the shock was immediate. Not merely has the OBR not acted this way before (described as an "unusual step"), its figures apparently contradicted the chancellor's words. Even as leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

Take the Treasury's most "unbreakable" rule, stating by 2030 daily spending on hospitals, schools, and the rest would be completely funded by taxes: at the end of October, the OBR calculated this would barely be met, albeit by a minuscule margin.

A few days later, Reeves gave a press conference so unprecedented that it caused breakfast TV to break from its usual fare. Several weeks before the actual budget, the country was put on alert: taxes would rise, and the main reason cited as pessimistic numbers from the OBR, specifically its conclusion suggesting the UK had become less efficient, putting more in but getting less out.

And so! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied recently, that is essentially what transpired at the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves deceived us was her justification, because these OBR forecasts didn't compel her actions. She might have made other choices; she might have provided other reasons, even on budget day itself. Prior to the recent election, Starmer promised exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is a lack of agency that jumps out in Reeves's breakfast speech. The first Labour chancellor for a decade and a half portrays herself as an apolitical figure at the mercy of forces outside her influence: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any political stripe would be standing here today, facing the decisions that I face."

She certainly make a choice, only not one Labour cares to broadcast. Starting April 2029 UK workers as well as businesses are set to be paying another £26bn a year in tax – and most of that will not be funding better hospitals, public services, or enhanced wellbeing. Whatever bilge is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Instead of being spent, over 50% of this extra cash will in fact give Reeves cushion against her own budgetary constraints. Approximately 25% is allocated to paying for the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the tax take will go on genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury only £2.5bn, as it was always an act of theatrical cruelty by George Osborne. A Labour government should have have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform along with all of right-wing media have been barking about how Reeves conforms to the stereotype of left-wing finance ministers, taxing strivers to fund shirkers. Party MPs are cheering her budget for being a relief for their troubled consciences, safeguarding the most vulnerable. Both sides are 180-degrees wrong: Reeves's budget was largely targeted towards asset managers, speculative capital and participants within the financial markets.

Downing Street can make a compelling argument in its defence. The margins from the OBR were deemed too small to feel secure, particularly considering bond investors demand from the UK the highest interest rate among G7 developed nations – higher than France, that recently lost its leader, higher than Japan that carries far greater debt. Combined with our measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves can say this budget 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. According to one independent adviser for Downing Street says, Reeves has effectively "weaponised" financial markets to act as an instrument of discipline against Labour MPs and the electorate. It's the reason the chancellor cannot resign, no matter what pledges are broken. It's the reason Labour MPs must knuckle down and vote to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft , a Broken Promise

What is absent here is the notion of statecraft, of mobilising the finance ministry and the central bank to forge a fresh understanding with investors. Missing too is any innate understanding of voters,