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The allegation represents a grave matter: suggesting Rachel Reeves may have lied to UK citizens, scaring them into accepting massive extra taxes which could be funneled into higher welfare payments. However exaggerated, this isn't usual political sparring; this time, the stakes could be damaging. Just last week, detractors aimed at Reeves alongside Keir Starmer had been labeling their budget "disorderly". Today, it's branded as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

This grave accusation demands straightforward responses, therefore here is my view. Has the chancellor tell lies? On the available information, apparently not. There were no whoppers. But, despite Starmer's recent comments, that doesn't mean there's no issue here and we can all move along. Reeves did mislead the public about the factors shaping her choices. Was it to funnel cash to "welfare recipients", as the Tories claim? No, as the numbers prove it.

A Reputation Sustains Another Blow, But Facts Should Prevail

Reeves has sustained a further blow to her standing, but, if facts continue to have anything to do with politics, Badenoch should stand down her lynch mob. Perhaps the resignation yesterday of OBR head, Richard Hughes, due to the leak of its own documents will quench SW1's appetite for scandal.

Yet the real story is far stranger than media reports indicate, extending wider and further beyond the political futures of Starmer and the 2024 intake. Fundamentally, herein lies a story about how much say you and I have in the running of our own country. And it should worry you.

First, to Brass Tacks

When the OBR published last Friday a portion of the forecasts it provided to Reeves as she prepared the red book, the shock was immediate. Not only has the OBR never done such a thing before (described as an "rare action"), its figures seemingly contradicted Reeves's statements. Even as leaks from Westminster were about how bleak the budget would have to be, the OBR's own forecasts were getting better.

Take the Treasury's so-called "iron-clad" fiscal rule, that by 2030 daily spending for hospitals, schools, and the rest must be completely paid for by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit by a minuscule margin.

A few days later, Reeves gave a press conference so extraordinary that it caused morning television to break from its usual fare. Several weeks before the actual budget, the country was warned: taxes were going up, with the main reason being pessimistic numbers provided by the OBR, specifically its conclusion suggesting the UK was less productive, investing more but getting less out.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds suggested recently, that is essentially what transpired at 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 could have chosen different options; she could have given alternative explanations, even during the statement. Before last year's election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, and it is powerlessness that jumps out from Reeves's pre-budget speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat at the mercy of forces outside her influence: "In the context of the long-term challenges with our productivity … any finance minister of any party would be in this position today, facing the decisions that I face."

She did make decisions, only not one Labour cares to broadcast. From April 2029 UK workers and businesses will be contributing an additional £26bn a year in tax – but most of that will not be spent on better hospitals, public services, nor enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Rather than being spent, over 50% of the extra cash will instead give Reeves cushion for her self-imposed budgetary constraints. About 25% is allocated to covering the government's own U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the taxes will go on actual new spending, for example scrapping the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it had long been an act of political theatre from George Osborne. A Labour government should have have binned it in its first 100 days.

The Real Target: The Bond Markets

Conservatives, Reform and the entire Blue Pravda have been railing against the idea that Reeves fits the caricature of Labour chancellors, soaking strivers to spend on shirkers. Party MPs have been cheering her budget as a relief for their social concerns, safeguarding the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was primarily targeted towards investment funds, speculative capital and the others in the bond markets.

Downing Street can make a compelling argument for itself. The margins from the OBR were deemed too small for comfort, especially considering bond investors charge the UK the highest interest rate of all G7 rich countries – higher than France, that recently lost its leader, and exceeding Japan that carries far greater debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say this budget allows the central bank to reduce interest rates.

You can see that those folk with red rosettes might not frame it this way next time they're on the doorstep. According to a consultant for Downing Street puts it, Reeves has effectively "utilised" the bond market as an instrument of discipline against her own party and the electorate. It's why Reeves cannot resign, regardless of which pledges she breaks. It is also the reason Labour MPs will have to fall into line and support measures that cut billions from social security, just as Starmer indicated yesterday.

Missing Political Vision and an Unfulfilled Promise

What's missing from this is the notion of statecraft, of harnessing the Treasury and the central bank to reach a fresh understanding with markets. Missing too is any intuitive knowledge of voters,