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The accusation represents a grave matter: that Rachel Reeves may have misled the British public, frightening them into accepting massive extra taxes which would be used for higher benefits. While exaggerated, this isn't typical Westminster sparring; this time, the stakes are higher. Just last week, detractors of Reeves and Keir Starmer were calling their budget "chaotic". Today, it is branded as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

Such a serious accusation requires clear responses, therefore here is my view. Did the chancellor been dishonest? Based on the available information, apparently not. She told no whoppers. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we should move on. The Chancellor did mislead the public about the factors informing her choices. Was it to funnel cash towards "welfare recipients", as the Tories claim? No, as the figures prove this.

A Standing Sustains A Further Hit, Yet Truth Must Win Out

The Chancellor has taken a further blow to her standing, but, if facts still matter in politics, Badenoch ought to call off her attack dogs. Perhaps the resignation recently of OBR head, Richard Hughes, due to the leak of its own documents will quench Westminster's thirst for blood.

But the true narrative is much more unusual compared to media reports indicate, and stretches broader and deeper beyond the political futures of Starmer and his 2024 intake. At its heart, this is an account concerning what degree of influence you and I get in the governance of the nation. And it concern you.

Firstly, to Brass Tacks

When the OBR released last Friday a portion of the forecasts it provided to Reeves as she prepared the budget, the surprise was instant. Not merely had the OBR never acted this way before (an "rare action"), its figures apparently went against Reeves's statements. While rumors from Westminster were about the grim nature of the budget was going to be, the OBR's own predictions were improving.

Take the government's most "unbreakable" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services would be wholly paid for by taxes: in late October, the watchdog calculated it would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a media briefing so extraordinary it forced morning television to break from its usual fare. Several weeks prior to the actual budget, the country was warned: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, in particular its conclusion suggesting the UK was less efficient, investing more but getting less out.

And so! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds implied recently, that is essentially what happened during the budget, which was big and painful and bleak.

The Deceptive Justification

The way in which Reeves misled us was her justification, since those OBR forecasts didn't compel her actions. She might have chosen other choices; she might have given alternative explanations, even on budget day itself. Before last year's election, Starmer promised exactly such public influence. "The promise of democracy. The strength of the vote. The possibility for national renewal."

A year on, yet it is a lack of agency that jumps out in Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself to be an apolitical figure at the mercy of forces outside her influence: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any party would be in this position today, facing the choices that I face."

She did make decisions, just not the kind the Labour party wishes to broadcast. Starting April 2029 British workers as well as businesses are set to be contributing another £26bn annually in taxes – and most of that will not go towards funding improved healthcare, public services, or enhanced wellbeing. Whatever bilge is spouted by 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 this additional revenue will instead provide Reeves a buffer for her own fiscal rules. About 25% goes on covering the government's own policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt towards Reeves, only 17% of the taxes will go on genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it was always a bit of theatrical cruelty from George Osborne. A Labour government should have have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with all of right-wing media have spent days barking about the idea that Reeves fits the caricature of left-wing finance ministers, taxing strivers to spend on shirkers. Party MPs have been applauding her budget for being balm for their social concerns, safeguarding the disadvantaged. Each group could be 180-degrees wrong: Reeves's budget was primarily targeted towards asset managers, hedge funds and the others in the bond markets.

The government can make a strong case for itself. The forecasts provided by the OBR were too small for comfort, especially given that bond investors demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost a prime minister, higher than Japan that carries way more debt. Combined with the policies to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan allows the central bank to cut its key lending rate.

It's understandable why those wearing Labour badges might not frame it in such terms next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has effectively "utilised" financial markets as an instrument of control against Labour MPs and the electorate. It's why Reeves cannot resign, no matter what pledges are broken. It's the reason Labour MPs must knuckle down and support measures that cut billions from social security, just as Starmer promised recently.

Missing Statecraft and a Broken Promise

What is absent from this is the notion of statecraft, of mobilising the finance ministry and the Bank to forge a new accommodation with markets. Also absent is intuitive knowledge of voters,