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This accusation is a serious one: that Rachel Reeves may have lied to Britons, scaring them into accepting billions in extra taxes that could be funneled into increased benefits. While exaggerated, this is not typical political sparring; this time, the consequences are higher. A week ago, critics aimed at Reeves and Keir Starmer were labeling their budget "a shambles". Today, it's branded as lies, with Kemi Badenoch demanding the chancellor's resignation.

This grave accusation demands clear answers, so here is my assessment. Did the chancellor been dishonest? On current evidence, no. There were no blatant falsehoods. But, despite Starmer's recent comments, it doesn't follow that there's no issue here and we can all move along. Reeves did mislead the public regarding the factors informing her choices. Was this all to funnel cash to "benefits street", as the Tories assert? No, as the figures prove it.

A Reputation Takes Another Hit, But Facts Should Prevail

The Chancellor has taken a further hit to her reputation, however, if facts continue to have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

Yet the real story is far stranger than the headlines indicate, extending broader and deeper beyond the political futures of Starmer and his 2024 intake. Fundamentally, this is a story about what degree of influence you and I have in the governance of our own country. This should should worry everyone.

First, on to the Core Details

After the OBR released last Friday a portion of the forecasts it provided to Reeves as she prepared the budget, the shock was instant. Not merely had the OBR not acted this way before (described as an "unusual step"), its numbers apparently contradicted Reeves's statements. While leaks from Westminster suggested the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Consider the government's so-called "unbreakable" fiscal rule, stating by 2030 daily spending on hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the watchdog calculated this would barely be met, albeit only by a minuscule margin.

Several days later, Reeves held a media briefing so unprecedented that it caused morning television to break from its regular schedule. Weeks prior to the real budget, the country was warned: taxes were going up, with the main reason cited as pessimistic numbers from the OBR, in particular its conclusion suggesting the UK had become less productive, putting more in but yielding less.

And lo! It came to pass. Despite what Telegraph editorials and Tory broadcast rounds implied over the weekend, this is basically what transpired at the budget, which was significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves deceived us was her alibi, because these OBR forecasts didn't compel her actions. She could have chosen different options; she might have given other reasons, even during the statement. Before the recent election, Starmer pledged exactly such public influence. "The promise of democracy. The power 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. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure buffeted by factors outside her influence: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be standing here today, facing the choices that I face."

She did make decisions, only not the kind Labour cares to broadcast. From April 2029 UK workers and businesses will be paying another £26bn annually in tax – and the majority of this will not be funding better hospitals, new libraries, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of this additional revenue will in fact give Reeves a buffer against her self-imposed fiscal rules. About 25% goes on covering the administration's policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt to Reeves, only 17% of the taxes will fund actual new spending, such as scrapping the two-child cap on child benefit. Removing it "will cost" the Treasury only £2.5bn, because it had long been a bit of political theatre by George Osborne. A Labour government should have have binned it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform along with all of right-wing media have been railing against the idea that Reeves conforms to the stereotype of Labour chancellors, soaking strivers to spend on the workshy. Party MPs are applauding her budget as a relief for their troubled consciences, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was largely aimed at investment funds, hedge funds and participants within the financial markets.

Downing Street can make a compelling argument for itself. The margins from the OBR were insufficient for comfort, especially given that lenders charge the UK the highest interest rate of all G7 rich countries – exceeding that of France, which lost a prime minister, higher than Japan that carries way more debt. Combined with the measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan allows the central bank to cut interest rates.

You can see that those wearing red rosettes may choose not to frame it this way when they're on the doorstep. According to a consultant for Downing Street says, Reeves has "weaponised" financial markets to act as an instrument of discipline over her own party and the electorate. This is why the chancellor can't resign, regardless of which promises are broken. It's the reason Labour MPs must knuckle down and vote to take billions off social security, as Starmer promised recently.

Missing Political Vision and an Unfulfilled Pledge

What's missing here is any sense of statecraft, of mobilising the Treasury and the Bank to reach a new accommodation with investors. Missing too is any innate understanding of voters,