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The charge carries significant weight: suggesting Rachel Reeves has misled the British public, spooking them to accept billions in additional taxes that would be spent on increased welfare payments. While exaggerated, this is not usual political bickering; this time, the stakes are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer were labeling their budget "a shambles". Today, it's branded as falsehoods, with Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge requires straightforward responses, therefore let me provide my assessment. Did the chancellor been dishonest? Based on current information, no. She told no whoppers. But, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there's nothing to see and we can all move along. The Chancellor did misinform the public about the considerations shaping her choices. Was this all to funnel cash towards "benefits street", like the Tories claim? Certainly not, and the numbers prove this.

A Standing Sustains Another Blow, Yet Truth Must Win Out

Reeves has taken another hit to her standing, but, should facts still have anything to do with politics, Badenoch ought to call off her lynch mob. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will satisfy SW1's thirst for blood.

Yet the real story is far stranger than the headlines indicate, and stretches wider and further beyond the careers of Starmer and the class of '24. Fundamentally, this is a story concerning what degree of influence you and I have in the governance of our own country. And it should worry you.

Firstly, on to the Core Details

When the OBR published last Friday some of the forecasts it shared with Reeves while she wrote the budget, the surprise was immediate. Not merely has the OBR never done such a thing before (an "exceptional move"), its figures seemingly went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were improving.

Take the Treasury'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 watchdog reckoned this would just about be met, albeit only by a minuscule margin.

A few days later, Reeves gave a press conference so extraordinary that it caused morning television to break from its regular schedule. Several weeks before the real budget, the nation was warned: taxes were going up, with the main reason being pessimistic numbers from the OBR, in particular its conclusion that the UK had become less efficient, investing more but yielding less.

And lo! It came to pass. Despite what Telegraph editorials combined with Tory media appearances suggested recently, that is basically what happened at the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us was her justification, because those OBR forecasts didn't force her hand. She might have made different options; she might have given other reasons, even on budget day itself. Before the recent election, Starmer pledged exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it's a lack of agency that is evident from Reeves's breakfast speech. The first Labour chancellor in 15 years portrays herself as an apolitical figure buffeted by forces outside her influence: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be standing here today, confronting the decisions that I face."

She certainly make decisions, only not one the Labour party cares to broadcast. From April 2029 British workers as well as businesses are set to be paying another £26bn a year in taxes – and most of that will not be spent on better hospitals, new libraries, or enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Cash Really Goes

Instead of going on services, more than 50% of the additional revenue will in fact provide Reeves cushion for her own budgetary constraints. About 25% goes on paying for the government's own policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt to Reeves, only 17% of the tax take will go on genuinely additional spending, such as abolishing the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always an act of theatrical cruelty by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The True Audience: Financial Institutions

Conservatives, Reform along with the entire Blue Pravda have spent days railing against the idea that Reeves fits the stereotype of Labour chancellors, soaking strivers to fund the workshy. Party MPs have been applauding her budget as balm to their social concerns, safeguarding the disadvantaged. Both sides are completely mistaken: The Chancellor's budget was largely aimed at asset managers, speculative capital and participants within the bond markets.

Downing Street could present a compelling argument for itself. The margins provided by the OBR were insufficient to feel secure, particularly given that bond investors charge the UK the highest interest rate among G7 rich countries – higher than France, which lost a prime minister, higher than Japan that carries far greater debt. Combined with our policies to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan enables the central bank to cut 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 to Downing Street puts it, Reeves has "utilised" the bond market as an instrument of control against Labour MPs and the electorate. It's why Reeves can't resign, regardless of which promises she breaks. It's the reason Labour MPs must knuckle down and vote that cut billions from social security, as Starmer indicated recently.

A Lack of Political Vision and an Unfulfilled Promise

What is absent from this is any sense of strategic governance, of mobilising the finance ministry and the central bank to reach a new accommodation with markets. Missing too is any intuitive knowledge of voters,