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The allegation represents a grave matter: suggesting Rachel Reeves has misled Britons, spooking them to accept massive extra taxes that would be funneled into higher benefits. However hyperbolic, this isn't usual Westminster bickering; on this occasion, the consequences are more serious. A week ago, detractors aimed at Reeves alongside Keir Starmer had been calling their budget "uncoordinated". Today, it is denounced as falsehoods, with Kemi Badenoch calling for the chancellor's resignation.

This grave accusation demands straightforward answers, so let me provide my assessment. Has the chancellor been dishonest? On current information, no. There were no major untruths. But, notwithstanding Starmer's yesterday's comments, that doesn't mean there is nothing to see and we can all move along. The Chancellor did misinform the public about the factors informing her decisions. Was this all to funnel cash towards "benefits street", like the Tories claim? Certainly not, as the figures demonstrate it.

A Standing Takes A Further Hit, But Facts Must Win Out

Reeves has sustained another hit to her reputation, however, if facts continue to have anything to do with politics, Badenoch ought to stand down her lynch mob. Perhaps the resignation yesterday of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

But the real story is much more unusual compared to the headlines suggest, and stretches broader and deeper than the political futures of Starmer and the 2024 intake. Fundamentally, this is an account concerning how much say the public have in the governance of our own country. And it should worry everyone.

Firstly, on to Brass Tacks

After the OBR released recently a portion of the forecasts it shared with Reeves as she prepared the red book, the shock was instant. Not only has the OBR not acted this way before (described as an "exceptional move"), its numbers seemingly went against the chancellor's words. Even as rumors from Westminster suggested how bleak the budget would have to be, the watchdog's predictions were improving.

Take the Treasury's most "iron-clad" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the watchdog calculated this would just about be met, albeit by a tiny margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to break from its usual fare. Several weeks prior to the actual budget, the country was warned: taxes were going up, with the primary cause cited as pessimistic numbers from the OBR, in particular its finding that the UK had become less efficient, investing more but yielding less.

And lo! It came to pass. Notwithstanding what Telegraph editorials combined with Tory broadcast rounds implied recently, that is essentially what happened at the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us concerned her justification, since these OBR forecasts didn't compel her actions. She might have made different options; she could have provided other reasons, including on budget day itself. Before last year's election, Starmer pledged exactly such people power. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, yet it's a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be a technocrat buffeted by forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any party would be standing here today, facing the choices that I face."

She did make a choice, only not one Labour cares to broadcast. Starting April 2029 British workers as well as businesses will be paying an additional £26bn annually in tax – but most of that will not go towards funding improved healthcare, new libraries, or enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Cash Really Goes

Rather than going on services, over 50% of the extra cash will instead give Reeves cushion for her self-imposed budgetary constraints. About 25% is allocated to covering the administration's policy reversals. Examining the OBR's calculations and being as generous as possible to a Labour chancellor, only 17% of the taxes will go on genuinely additional spending, for example abolishing the limit on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, because it was always an act of theatrical cruelty from George Osborne. This administration should have abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform and all of right-wing media have spent days barking about how Reeves fits the caricature of left-wing finance ministers, taxing hard workers to spend on the workshy. Labour backbenchers are cheering her budget as a relief for their troubled consciences, protecting the disadvantaged. Both sides are completely mistaken: Reeves's budget was largely aimed at asset managers, speculative capital and participants within the bond markets.

Downing Street can make a strong case in its defence. The forecasts provided by the OBR were insufficient to feel secure, particularly given that lenders demand from the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, which lost a prime minister, and exceeding Japan which has far greater debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget enables the Bank of England to cut interest rates.

It's understandable why those wearing Labour badges might not couch it this way next time they visit the doorstep. According to a consultant for Downing Street says, Reeves has "utilised" financial markets as a tool of control over her own party and the voters. It's the reason Reeves cannot resign, regardless of which pledges she breaks. It's the reason Labour MPs will have to knuckle down and vote to take billions off social security, just as Starmer promised yesterday.

A Lack of Statecraft , a Broken Promise

What is absent from this is any sense of strategic governance, of mobilising the Treasury and the Bank to forge a fresh understanding with markets. Also absent is intuitive knowledge of voters,