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The accusation is a serious one: that Rachel Reeves has lied to the British public, scaring them to accept massive extra taxes which could be spent on increased welfare payments. However exaggerated, this isn't typical Westminster sparring; on this occasion, the consequences are higher. Just last week, critics aimed at Reeves and Keir Starmer had been labeling their budget "a shambles". Now, it is branded as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

Such a grave accusation requires straightforward answers, so here is my assessment. Did the chancellor lied? On the available evidence, apparently not. There were no whoppers. But, despite Starmer's yesterday's comments, that doesn't mean there's nothing to see and we should move on. Reeves did misinform the public about the considerations informing her choices. Was it to funnel cash to "welfare recipients", as the Tories claim? No, and the figures demonstrate it.

A Standing Takes A Further Hit, But Facts Should Prevail

Reeves has sustained another blow to her standing, but, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

But the real story is much more unusual compared to media reports suggest, and stretches broader and deeper beyond the political futures of Starmer and his class of '24. At its heart, herein lies a story concerning how much say you and I get over the running of the nation. And it should worry everyone.

Firstly, to Brass Tacks

When the OBR published last Friday a portion of the projections it shared with Reeves while she wrote the red book, the surprise was immediate. Not only has the OBR not acted this way before (an "unusual step"), its numbers apparently went against Reeves's statements. While rumors from Westminster were about how bleak the budget was going to be, the watchdog's forecasts were getting better.

Consider the government's so-called "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services would be wholly funded by taxes: in late October, the OBR reckoned this would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to interrupt its regular schedule. Several weeks before the actual budget, the country was warned: taxes would rise, with the main reason cited as pessimistic numbers provided by the OBR, specifically its finding that the UK had become less productive, putting more in but getting less out.

And so! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested recently, that is essentially what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us was her justification, since those OBR forecasts did not force her hand. She could have made different options; she might have provided other reasons, even during the statement. Prior to last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, and it's powerlessness that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself as an apolitical figure at the mercy of factors outside her influence: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be in this position today, confronting the choices that I face."

She did make decisions, just not the kind the Labour party cares to broadcast. Starting April 2029 UK workers as well as businesses are set to be contributing another £26bn annually in taxes – but the majority of this will not be funding improved healthcare, new libraries, nor happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Cash Actually Ends Up

Instead of going on services, over 50% of the extra cash will instead give Reeves a buffer against her own fiscal rules. Approximately 25% goes on covering the administration's policy reversals. Examining the OBR's calculations and being as generous as possible towards Reeves, a mere 17% of the tax take will go on genuinely additional spending, such as scrapping the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, because it was always an act of political theatre by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform and the entire right-wing media have spent days railing against the idea that Reeves fits the caricature of left-wing finance ministers, soaking strivers to spend on the workshy. Party MPs have been applauding her budget as a relief for their social concerns, protecting the most vulnerable. Each group are completely mistaken: The Chancellor's budget was primarily targeted towards asset managers, hedge funds and participants within the financial markets.

Downing Street can make a compelling argument in its defence. The margins from the OBR were deemed insufficient for comfort, particularly given that bond investors demand from the UK the highest interest rate of all G7 rich countries – higher than France, that recently lost its leader, and exceeding Japan that carries way more debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget enables the Bank of England to cut interest rates.

You can see that those folk with red rosettes may choose not to frame it in such terms when they're on the doorstep. According to one independent adviser for Downing Street says, Reeves has effectively "utilised" the bond market as an instrument of discipline against Labour MPs and the electorate. It's why the chancellor can't resign, no matter what promises are broken. It's the reason Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer indicated yesterday.

Missing Political Vision and an Unfulfilled Pledge

What is absent here is any sense of statecraft, of mobilising the Treasury and the central bank to forge a new accommodation with markets. Also absent is any intuitive knowledge of voters,