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This allegation represents a grave matter: that Rachel Reeves has misled Britons, scaring them into accepting billions in extra taxes that could be spent on higher benefits. However exaggerated, this isn't usual political sparring; this time, the stakes could be damaging. Just last week, detractors of Reeves and Keir Starmer had been labeling their budget "chaotic". Now, it is denounced as lies, and Kemi Badenoch calling for the chancellor's resignation.

This serious accusation requires clear answers, therefore here is my view. Did the chancellor been dishonest? On the available information, no. She told no major untruths. However, despite Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we can all move along. Reeves did misinform the public about the considerations informing her choices. Was this all to funnel cash to "welfare recipients", as the Tories assert? Certainly not, as the figures demonstrate it.

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

Reeves has taken another hit to her standing, but, should facts continue to have anything to do with politics, Badenoch ought to call off her lynch mob. Perhaps the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will quench Westminster's thirst for blood.

Yet the real story is much more unusual compared to the headlines indicate, extending broader and deeper beyond the careers of Starmer and his 2024 intake. Fundamentally, herein lies a story concerning what degree of influence the public have over the governance of the nation. And it concern you.

Firstly, to the Core Details

When the OBR published last Friday a portion of the forecasts it shared with Reeves while she prepared the red book, the shock was instant. Not only has the OBR never done such a thing before (described as an "exceptional move"), its figures seemingly contradicted the chancellor's words. Even as leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were improving.

Consider the government's most "unbreakable" fiscal rule, that by 2030 daily spending for hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves gave a media briefing so extraordinary it forced morning television to break from its regular schedule. Weeks before the real budget, the country was put on alert: taxes would rise, and the main reason cited as gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, investing more but getting less out.

And so! It happened. Despite the implications from Telegraph editorials combined with Tory media appearances implied over the weekend, this is basically what transpired at the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

Where Reeves deceived us concerned her justification, since these OBR forecasts did not compel her actions. She could have chosen different options; she could have given other reasons, even on budget day itself. Before the recent election, Starmer promised exactly such people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

One year later, and it's a lack of agency that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be a technocrat buffeted by forces beyond her control: "In the context of the long-term challenges with our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She certainly make decisions, only not the kind the Labour party cares to broadcast. Starting April 2029 UK workers as well as businesses are set to be paying an additional £26bn a year in taxes – and most of that will not be spent on better hospitals, public services, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of the additional revenue will in fact give Reeves cushion against her self-imposed fiscal rules. Approximately 25% is allocated to covering the administration's U-turns. Reviewing the watchdog's figures and being as generous as possible towards Reeves, a mere 17% of the taxes will go on actual new spending, such as scrapping the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, as it was always an act of theatrical cruelty by George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform and the entire Blue Pravda have been railing against how Reeves fits the caricature of left-wing finance ministers, taxing hard workers to fund shirkers. Labour backbenchers have been cheering her budget as balm to their troubled consciences, safeguarding the disadvantaged. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily aimed at asset managers, hedge funds and participants within the bond markets.

The government can make a strong case for itself. The margins from the OBR were deemed too small for comfort, particularly given that bond investors demand from the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, that recently lost a prime minister, and exceeding Japan which has way more debt. Combined with the policies to hold down fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget enables the Bank of England to cut its key lending rate.

It's understandable that those wearing Labour badges may choose not to frame it in such terms when they're on the doorstep. As a consultant to Downing Street says, Reeves has effectively "utilised" the bond market to act as an instrument of control over her own party and the electorate. It's why the chancellor cannot resign, no matter what promises are broken. It's why Labour MPs will have to knuckle down and support measures to take billions off social security, just as Starmer promised yesterday.

A Lack of Political Vision , an Unfulfilled Pledge

What is absent from this is the notion of strategic governance, of harnessing the Treasury and the Bank to reach a fresh understanding with investors. Also absent is any intuitive knowledge of voters,