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This allegation represents a grave matter: suggesting Rachel Reeves has lied to UK citizens, scaring them into accepting billions in additional taxes which would be funneled into increased welfare payments. While exaggerated, this isn't usual political sparring; this time, the consequences are more serious. A week ago, critics aimed at Reeves and Keir Starmer were labeling their budget "disorderly". Today, it's branded as falsehoods, with Kemi Badenoch demanding Reeves to step down.

This grave charge demands clear answers, so let me provide my view. Has the chancellor tell lies? On the available information, no. There were no major untruths. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we can all move along. The Chancellor did mislead the public about the factors shaping her decisions. Was it to channel cash towards "welfare recipients", like the Tories claim? Certainly not, as the figures demonstrate this.

A Standing Takes A Further Blow, Yet Truth Should Prevail

Reeves has taken a further hit to her reputation, however, should facts continue to have anything to do with politics, Badenoch should call off her attack dogs. Perhaps the stepping down recently of OBR head, Richard Hughes, over the leak of its own documents will satisfy Westminster's appetite for scandal.

But the true narrative is much more unusual compared to media reports indicate, and stretches wider and further than the careers of Starmer and the 2024 intake. Fundamentally, this is a story concerning what degree of influence the public have over the running of our own country. And it should worry everyone.

First, on to the Core Details

When the OBR released last Friday a portion of the forecasts it provided to Reeves while she prepared the red book, the surprise was instant. Not only had the OBR never acted this way before (described as an "rare action"), its figures seemingly contradicted Reeves's statements. Even as rumors from Westminster suggested how bleak the budget would have 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 other services would be wholly paid for by taxes: at the end of October, the OBR calculated this would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a media briefing so unprecedented it forced morning television to break from its usual fare. Weeks before the real budget, the nation was warned: taxes were going up, with the primary cause cited as gloomy numbers provided by the OBR, specifically its finding suggesting the UK had become less efficient, investing more but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied recently, this is basically what happened during the budget, that proved to be significant, harsh, and grim.

The Deceptive Justification

Where Reeves deceived us was her justification, since these OBR forecasts didn't force her hand. She could have made different options; she might have provided other reasons, including on budget day itself. Prior to last year's 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 in Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself as a technocrat at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any party would be standing here today, facing the decisions that I face."

She certainly make decisions, just not one the Labour party cares to broadcast. From April 2029 British workers as well as businesses are set to be paying an additional £26bn annually in tax – and the majority of this will not go towards funding improved healthcare, public services, nor happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "benefits street".

Where the Money Really Goes

Instead of being spent, more than 50% of the additional revenue will in fact provide Reeves a buffer against her self-imposed fiscal rules. Approximately 25% is allocated to covering the government's own policy reversals. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards Reeves, only 17% of the taxes will go on actual new spending, for example abolishing the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always an act of theatrical cruelty from George Osborne. A Labour government should have abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform and all of Blue Pravda have been barking about how Reeves conforms to the caricature of left-wing finance ministers, soaking hard workers to spend on shirkers. Party MPs are applauding her budget as balm for their social concerns, protecting the most vulnerable. Both sides are 180-degrees wrong: Reeves's budget was largely aimed at investment funds, speculative capital and the others in the financial markets.

The government can make a strong case in its defence. The forecasts provided by the OBR were deemed too small to feel secure, particularly considering lenders demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, that recently lost a prime minister, higher than Japan that carries far greater debt. Combined with our policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan allows the Bank of England to cut interest rates.

It's understandable why those folk with Labour badges may choose not to frame it in such terms when they visit the doorstep. As one independent adviser for Downing Street says, Reeves has effectively "weaponised" the bond market to act as a tool of control over her own party and the electorate. It's why Reeves cannot resign, no matter what promises are broken. It's the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer indicated yesterday.

Missing Political Vision and an Unfulfilled Promise

What's missing here is the notion of statecraft, of harnessing the Treasury and the Bank to reach a fresh understanding with markets. Missing too is intuitive knowledge of voters,