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The accusation is a serious one: that Rachel Reeves may have lied to UK citizens, frightening them into accepting billions in additional taxes which would be funneled into increased welfare payments. However hyperbolic, this isn't usual political sparring; on this occasion, the consequences are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer were labeling their budget "chaotic". Today, it is branded as lies, and Kemi Badenoch calling for Reeves to step down.

Such a grave accusation requires clear responses, therefore here is my view. Did the chancellor lied? Based on the available information, apparently not. She told no whoppers. However, despite Starmer's recent remarks, that doesn't mean there is nothing to see and we should move on. The Chancellor did misinform the public regarding the considerations informing her decisions. Was it to channel cash to "benefits street", as the Tories assert? Certainly not, and the figures prove this.

A Reputation Sustains A Further Hit, Yet Truth Should Win Out

Reeves has taken a further hit to her reputation, however, should facts still have anything to do with politics, Badenoch ought to call off her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, due to the leak of its own documents will quench SW1's appetite for scandal.

But the true narrative is far stranger than the headlines indicate, and stretches broader and deeper beyond the careers of Starmer and the 2024 intake. Fundamentally, this is an account about what degree of influence the public get in the governance of our own country. This should concern you.

First, on to the Core Details

After the OBR released last Friday some of the forecasts it provided to Reeves while she wrote the red book, the surprise was instant. Not only had the OBR never done such a thing before (described as an "rare action"), its figures seemingly went against the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were improving.

Consider the Treasury's so-called "unbreakable" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and the rest would be completely paid for by taxes: in late October, the OBR calculated this would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented that it caused breakfast TV to break from its regular schedule. Weeks before the actual budget, the nation was warned: taxes were going up, and the main reason being gloomy numbers provided by the OBR, in particular its finding suggesting the UK was less efficient, investing more but yielding less.

And so! It came to pass. Notwithstanding what Telegraph editorials combined with Tory media appearances implied recently, this is essentially what happened during the budget, which was big and painful and bleak.

The Misleading Justification

Where Reeves deceived us was her justification, because these OBR forecasts did not force her hand. She could have chosen other choices; she could have provided alternative explanations, even during the statement. Prior to last year's election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, and it's a lack of agency that jumps out from Reeves's pre-budget speech. The first Labour chancellor in 15 years portrays herself to be a technocrat buffeted by factors beyond her control: "In the context of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, facing the choices that I face."

She certainly make a choice, just not the kind the Labour party cares to broadcast. From April 2029 British workers as well as businesses will be contributing another £26bn a year in tax – and most of that will not go towards funding improved healthcare, new libraries, or enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Instead of going on services, over 50% of this extra cash will in fact provide Reeves a buffer against her own fiscal rules. Approximately 25% goes on covering the administration's U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt to Reeves, a mere 17% of the taxes will go on genuinely additional spending, such as abolishing the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, as it was always an act of theatrical cruelty by George Osborne. This administration should have abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform along with all of Blue Pravda have spent days railing against how Reeves fits the stereotype of left-wing finance ministers, soaking hard workers to fund the workshy. Party MPs have been applauding her budget as a relief to their social concerns, safeguarding the disadvantaged. Both sides are 180-degrees wrong: The Chancellor's budget was largely targeted towards asset managers, speculative capital and participants within the financial markets.

Downing Street can make a strong case in its defence. The forecasts provided by the OBR were deemed too small for comfort, especially considering bond investors demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries way more debt. Combined with our policies 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 its key lending rate.

It's understandable that those folk with red rosettes may choose not to frame it in such terms next time they're on the doorstep. According to one independent adviser to Downing Street puts it, Reeves has effectively "weaponised" financial markets as a tool of control over her own party and the electorate. It's why Reeves can't resign, no matter what promises she breaks. It is also why Labour MPs will have to knuckle down and support measures that cut billions from social security, as Starmer indicated yesterday.

A Lack of Political Vision and an Unfulfilled Promise

What's missing from this is any sense of strategic governance, of mobilising the finance ministry and the central bank to forge a new accommodation with investors. Also absent is innate understanding of voters,