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The accusation carries significant weight: that Rachel Reeves may have deceived the British public, frightening them into accepting billions in extra taxes that would be spent on higher welfare payments. However hyperbolic, this isn't usual political sparring; on this occasion, the stakes are higher. A week ago, detractors of Reeves alongside Keir Starmer had been calling their budget "disorderly". Today, it's branded as lies, and Kemi Badenoch demanding the chancellor's resignation.

This grave charge demands straightforward answers, therefore here is my assessment. Has the chancellor tell lies? On the available information, apparently not. She told no major untruths. But, despite Starmer's yesterday's remarks, that doesn't mean there is no issue here and we can all move along. Reeves did mislead the public about the considerations shaping her choices. Was this all to funnel cash to "welfare recipients", like the Tories assert? Certainly not, as the figures demonstrate it.

A Reputation Takes Another Blow, But Facts Must Prevail

Reeves has taken another blow to her reputation, however, should facts continue to have anything to do with politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its own documents will quench SW1's appetite for scandal.

But the real story is much more unusual than the headlines indicate, extending broader and deeper beyond the political futures of Starmer and the class of '24. At its heart, herein lies a story concerning what degree of influence the public have in the governance of our own country. And it concern everyone.

Firstly, to the Core Details

When the OBR released last Friday some of the forecasts it shared with Reeves while she prepared the budget, the surprise was instant. Not merely had the OBR never done such a thing before (an "rare action"), its figures apparently went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the OBR's own predictions were getting better.

Consider the government's most "unbreakable" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the OBR calculated this would just about be met, albeit by a minuscule margin.

A few days later, Reeves gave a press conference so unprecedented it forced breakfast TV to interrupt its regular schedule. Several weeks before the real budget, the nation was put on alert: taxes would rise, with the primary cause being pessimistic numbers provided by the OBR, specifically its finding suggesting the UK had become less productive, investing more but getting less out.

And so! It came to pass. Despite the implications from Telegraph editorials and Tory media appearances implied over the weekend, this is essentially what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us was her alibi, since those OBR forecasts didn't compel her actions. She could have made other choices; she could have given alternative explanations, including during the statement. Before last year's election, Starmer pledged precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it is a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself to be an apolitical figure buffeted by factors beyond her control: "In the context of the persistent challenges with our productivity … any chancellor of any political stripe would be in this position today, facing the choices that I face."

She did make a choice, only not one the Labour party wishes to publicize. From April 2029 British workers and businesses are set to be contributing another £26bn annually in taxes – and the majority of this will not go towards funding better hospitals, new libraries, nor enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of the extra cash will instead give Reeves cushion for her self-imposed budgetary constraints. Approximately 25% is allocated to covering the administration's U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt towards Reeves, only 17% of the taxes will fund actual new spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been a bit of theatrical cruelty by George Osborne. A Labour government could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform along with the entire right-wing media have spent days barking about the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing strivers to spend on shirkers. Labour backbenchers have been cheering her budget as a relief to their social concerns, protecting the disadvantaged. Both sides are completely mistaken: Reeves's budget was largely targeted towards investment funds, speculative capital and participants within the financial markets.

The government can make a strong case for itself. The forecasts from the OBR were deemed insufficient to feel secure, particularly considering bond investors charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan which has way more debt. Combined with our policies to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the central bank to reduce its key lending rate.

It's understandable that those folk with red rosettes might not couch it this way next time they're on #Labourdoorstep. According to a consultant for Downing Street says, Reeves has "utilised" financial markets as an instrument of control over her own party and the electorate. This is why Reeves can't resign, regardless of which pledges she breaks. It is also the reason Labour MPs will have to fall into line and vote to take billions off social security, as Starmer indicated yesterday.

Missing Statecraft , a Broken Pledge

What's missing from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to reach a new accommodation with markets. Also absent is intuitive knowledge of voters,