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This charge carries significant weight: suggesting Rachel Reeves has misled Britons, frightening them to accept billions in extra taxes which could be used for increased benefits. While exaggerated, this is not usual Westminster sparring; on this occasion, the consequences are more serious. A week ago, critics of Reeves alongside Keir Starmer were labeling their budget "chaotic". Now, it is denounced as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

Such a serious accusation demands straightforward responses, therefore here is my view. Did the chancellor been dishonest? Based on current information, apparently not. There were no whoppers. However, notwithstanding Starmer's yesterday's comments, that doesn't mean there is nothing to see and we should move on. Reeves did misinform the public regarding the factors informing her decisions. Was it to channel cash towards "benefits street", as the Tories claim? Certainly not, as the numbers demonstrate it.

A Reputation Takes Another Hit, But Facts Should Prevail

The Chancellor has taken another hit to her reputation, however, should facts still matter in politics, Badenoch should call off her attack dogs. Maybe the resignation yesterday of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

But the real story is much more unusual than media reports indicate, extending broader and deeper than the political futures of Starmer and his class of '24. Fundamentally, this is an account about what degree of influence the public get over the governance of the nation. This should concern you.

Firstly, to Brass Tacks

After the OBR published last Friday some of the projections it provided to Reeves while she prepared the budget, the surprise was immediate. Not merely has the OBR never done such a thing before (described as an "rare action"), its numbers seemingly went against Reeves's statements. Even as rumors from Westminster were about how bleak the budget was going to be, the watchdog's forecasts were getting better.

Take the Treasury's so-called "unbreakable" rule, that by 2030 day-to-day spending on hospitals, schools, and other services would be completely funded by taxes: in late October, the watchdog calculated this would barely be met, albeit by a tiny margin.

A few days later, Reeves gave a media briefing so extraordinary that it caused morning television to interrupt its usual fare. Weeks before the real budget, the country was put on alert: taxes would rise, with the main reason cited as pessimistic numbers from the OBR, specifically its conclusion that the UK was less productive, investing more but getting less out.

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

The Deceptive Justification

The way in which Reeves misled us was her alibi, since those OBR forecasts didn't force her hand. She could have chosen different options; she might have provided other reasons, including during the statement. Before the recent election, Starmer promised precisely this kind of public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it is powerlessness that is evident in Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be an apolitical figure buffeted by factors beyond her control: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, only not the kind Labour cares to publicize. From April 2029 UK workers as well as businesses will be paying an additional £26bn annually in taxes – but the majority of this will not be 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 Actually Ends Up

Rather than being spent, over 50% of this extra cash will in fact provide Reeves cushion against her own budgetary constraints. About 25% goes on covering the administration's policy reversals. Reviewing the watchdog's figures and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the taxes will go on genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, because it was always an act of political theatre by George Osborne. This administration could and should abolished it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform and the entire right-wing media have been railing against how Reeves conforms to the stereotype of Labour chancellors, soaking strivers to spend on shirkers. Party MPs have been applauding her budget as balm to their social concerns, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was primarily targeted towards asset managers, speculative capital and the others in the financial markets.

The government can make a strong case 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, which lost a prime minister, and exceeding Japan which has way more debt. Combined with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget allows the central bank to reduce its key lending rate.

You can see why those folk with Labour badges might not couch it this way when they're on the doorstep. According to one independent adviser for Downing Street puts it, Reeves has effectively "utilised" the bond market as a tool of discipline over her own party and the voters. This is why the chancellor cannot resign, regardless of which promises are broken. It is also the reason Labour MPs must fall into line and vote that cut billions from social security, as Starmer promised recently.

A Lack of Political Vision , an Unfulfilled Pledge

What's missing from this is any sense of statecraft, of harnessing the finance ministry and the Bank to reach a fresh understanding with markets. Missing too is intuitive knowledge of voters,