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This charge carries significant weight: suggesting Rachel Reeves has deceived UK citizens, spooking them to accept billions in extra taxes that could be spent on higher benefits. While hyperbolic, this is not typical Westminster bickering; this time, the consequences could be damaging. Just last week, detractors of Reeves and Keir Starmer were calling their budget "a mess". Now, it is denounced as lies, with Kemi Badenoch demanding Reeves to step down.

Such a serious accusation requires straightforward responses, so here is my view. Has the chancellor lied? On current evidence, apparently not. She told no whoppers. However, despite Starmer's yesterday's remarks, it doesn't follow that there's no issue here and we should move on. Reeves did mislead the public about the factors shaping her decisions. Was this all to funnel cash to "welfare recipients", like the Tories assert? Certainly not, and the numbers demonstrate this.

A Standing Takes A Further Blow, Yet Truth Should Win Out

The Chancellor has sustained another blow to her reputation, however, should facts still matter in politics, Badenoch should stand down her lynch mob. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its own documents will satisfy SW1's appetite for scandal.

But the true narrative is far stranger than media reports suggest, and stretches broader and deeper beyond the political futures of Starmer and the 2024 intake. Fundamentally, this is an account about how much say you and I get over the governance of the nation. This should should worry you.

First, 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 immediate. Not merely had the OBR never done such a thing before (described as an "exceptional move"), its figures seemingly went against Reeves's statements. While rumors from Westminster suggested how bleak the budget would have to be, the watchdog's predictions were getting better.

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

Several days later, Reeves gave a press conference so extraordinary it forced morning television to break from its regular schedule. Weeks before the real budget, the country was put on alert: taxes were going up, and the primary cause being pessimistic numbers provided by the OBR, in particular its finding suggesting the UK had become less productive, putting more in but yielding less.

And so! It happened. Notwithstanding the implications from Telegraph editorials and Tory media appearances implied recently, that is essentially what transpired at the budget, that proved to be significant, harsh, and grim.

The Deceptive Alibi

The way in which Reeves deceived us was her alibi, because those OBR forecasts did not force her hand. She could have made other choices; she could have provided other reasons, including during the statement. Prior to the recent election, Starmer pledged exactly such 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 jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays 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 political stripe would be standing here today, confronting the choices that I face."

She did make a choice, only not the kind the Labour party cares to broadcast. From April 2029 British workers as well as businesses will be contributing an additional £26bn annually in tax – and the majority of this will not go towards funding improved healthcare, public services, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of this additional revenue will instead provide Reeves a buffer for her own budgetary constraints. Approximately 25% goes on paying for the administration's U-turns. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the tax take will fund actual new spending, such as scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, because it was always an act of theatrical cruelty by George Osborne. This administration could and should abolished 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 railing against the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to fund the workshy. Labour backbenchers have been cheering her budget as balm for their social concerns, safeguarding the most vulnerable. Both sides could be 180-degrees wrong: Reeves's budget was primarily targeted towards asset managers, hedge funds and participants within the bond markets.

Downing Street could present a strong case in its defence. The margins from the OBR were too small for comfort, especially considering lenders demand from the UK the highest interest rate among G7 rich countries – exceeding that of France, which lost a prime minister, and exceeding Japan that carries way more debt. Combined with the policies to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue their plan allows the Bank of England to reduce its key lending rate.

It's understandable why those folk with Labour badges may choose not to couch it this way next time they visit #Labourdoorstep. As a consultant for Downing Street says, Reeves has "weaponised" the bond market to act as an instrument of control over her own party and the electorate. It's the reason Reeves cannot resign, no matter what promises are broken. It is also why Labour MPs will have to fall into line and support measures that cut billions from social security, just as Starmer promised recently.

A Lack of Political Vision and a Broken Promise

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