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The allegation carries significant weight: suggesting Rachel Reeves has misled UK citizens, scaring them to accept billions in additional taxes which would be funneled into higher benefits. However hyperbolic, this is not usual Westminster bickering; on this occasion, the stakes are more serious. A week ago, detractors of Reeves and Keir Starmer had been labeling their budget "a shambles". Today, it's branded as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

Such a serious charge demands straightforward responses, therefore let me provide my view. Did the chancellor been dishonest? Based on the available evidence, no. She told no blatant falsehoods. But, notwithstanding Starmer's recent comments, it doesn't follow that there is nothing to see and we can all move along. The Chancellor did mislead the public regarding the factors shaping her choices. Was it to funnel cash towards "welfare recipients", like the Tories assert? No, as the numbers prove this.

A Standing Takes Another Blow, But Facts Should Prevail

The Chancellor has taken a further hit to her reputation, however, should facts still matter in politics, Badenoch ought to call off her lynch mob. Perhaps the stepping down yesterday of OBR head, Richard Hughes, over the leak of its internal documents will satisfy Westminster's thirst for blood.

But the true narrative is far stranger compared to the headlines suggest, and stretches broader and deeper beyond the political futures of Starmer and the class of '24. At its heart, this is a story about how much say the public have over the running of the nation. This should concern you.

Firstly, to the Core Details

When the OBR published recently a portion of the forecasts it shared with Reeves as she wrote the red book, the shock was instant. Not merely had the OBR not done such a thing before (described as an "unusual step"), its numbers seemingly contradicted the chancellor's words. Even as leaks from Westminster suggested the grim nature of the budget would have to be, the OBR's own forecasts were improving.

Take the Treasury's so-called "iron-clad" fiscal rule, stating by 2030 daily spending for hospitals, schools, and the rest would be completely funded by taxes: at the end of October, the OBR calculated this would just about be met, albeit only by a minuscule margin.

A few days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to interrupt its usual fare. Several weeks before the actual budget, the nation was put on alert: taxes would rise, and the primary cause cited as gloomy numbers provided by the OBR, in particular its finding suggesting the UK was less productive, putting more in but yielding less.

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

The Deceptive Justification

Where Reeves misled us concerned her alibi, since those OBR forecasts did not compel her actions. She might have chosen different options; she might have given 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, and it's a lack of agency that jumps out from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure buffeted by forces outside her influence: "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 certainly make decisions, only not the kind the Labour party wishes to broadcast. Starting April 2029 UK workers and businesses will be contributing an additional £26bn a year in taxes – and most of that will not go towards funding improved healthcare, new libraries, nor enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Rather than going on services, more than 50% of this additional revenue will instead give Reeves a buffer against her self-imposed budgetary constraints. Approximately 25% is allocated to covering the government's own U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, a mere 17% of the taxes will go on actual new spending, such as 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 by George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform along with the entire right-wing media have been barking about the idea that Reeves fits the caricature of left-wing finance ministers, soaking hard workers to fund shirkers. Labour backbenchers are cheering her budget for being a relief to their troubled consciences, protecting the disadvantaged. Both sides are completely mistaken: The Chancellor's budget was primarily targeted towards asset managers, speculative capital and the others in the financial markets.

The government could present a strong case for itself. The margins from the OBR were deemed insufficient to feel secure, particularly considering bond investors demand from the UK the highest interest rate of all G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the Bank of England to cut its key lending rate.

It's understandable why those folk with Labour badges may choose not to couch it in such terms next time they visit the doorstep. According to one independent adviser for Downing Street puts it, Reeves has effectively "utilised" financial markets to act as a tool of discipline against Labour MPs and the voters. It's the reason the chancellor cannot resign, regardless of which promises she breaks. It's the reason Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer promised yesterday.

Missing Political Vision and a Broken Promise

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