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The allegation represents a grave matter: that Rachel Reeves has lied to UK citizens, frightening them to accept massive extra taxes that would be funneled into higher welfare payments. While exaggerated, this isn't usual Westminster sparring; this time, the stakes could be damaging. Just last week, critics aimed at Reeves alongside Keir Starmer had been calling their budget "a mess". Now, it's denounced as lies, with Kemi Badenoch demanding the chancellor to quit.

This serious charge demands straightforward responses, therefore here is my view. Did the chancellor tell lies? On the available evidence, no. There were no major untruths. But, despite Starmer's recent remarks, it doesn't follow that there's no issue here and we should move on. Reeves did mislead the public regarding the considerations shaping her choices. Was it to channel cash to "welfare recipients", as the Tories assert? Certainly not, and the figures prove this.

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

Reeves has sustained another hit to her reputation, however, should facts still have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its own documents will quench SW1's appetite for scandal.

Yet the true narrative is far stranger compared to the headlines suggest, and stretches wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is an account concerning what degree of influence you and I get over the running of our own country. This should should worry everyone.

First, to the Core Details

When the OBR published last Friday some of the projections it shared with Reeves as she wrote the red book, the surprise was instant. Not only has the OBR never done such a thing before (described as an "exceptional move"), its figures seemingly went against Reeves's statements. While leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were improving.

Take the Treasury's most "iron-clad" rule, that by 2030 daily spending for hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR calculated it would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a press conference so unprecedented that it caused morning television to break from its regular schedule. Several weeks before the actual budget, the nation was put on alert: taxes would rise, and the primary cause cited as pessimistic numbers provided by the OBR, in particular its conclusion suggesting the UK was less productive, investing more but getting less out.

And lo! It happened. Despite the implications from Telegraph editorials and Tory media appearances suggested recently, this is essentially what transpired during the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

The way in which Reeves misled us concerned her justification, since these OBR forecasts didn't compel her actions. She might have chosen different options; she might have given other reasons, even on budget day itself. Prior to the recent election, Starmer promised precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it is powerlessness that is evident from Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any party would be standing here today, facing the choices that I face."

She certainly make decisions, just not one Labour cares to broadcast. From April 2029 British workers as well as businesses will be paying an additional £26bn a year in tax – and the majority of this will not be spent on better hospitals, new libraries, or enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Money Really Goes

Instead of going on services, more than 50% of the extra cash will in fact provide Reeves cushion against her own fiscal rules. About 25% is allocated to paying for the government's own policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt towards Reeves, a mere 17% of the taxes will go on genuinely additional spending, such as abolishing 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. This administration should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform and all of right-wing media have spent days railing against how Reeves conforms to the stereotype of left-wing finance ministers, taxing hard workers to spend on shirkers. Labour backbenchers have been cheering her budget for being a relief to their social concerns, safeguarding the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily targeted towards asset managers, speculative capital and participants within the financial markets.

Downing Street can make a compelling argument for itself. The forecasts from the OBR were insufficient for comfort, especially given that lenders charge the UK the greatest borrowing cost of all G7 developed nations – higher than France, which lost its leader, and exceeding Japan which has way more debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget allows the Bank of England to reduce its key lending rate.

You can see why those folk with red rosettes might not couch it in such terms when they visit the doorstep. As one independent adviser to Downing Street puts it, Reeves has effectively "weaponised" financial markets as a tool of discipline against her own party and the electorate. It's why Reeves cannot resign, no matter what promises are broken. It is also the reason Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer promised yesterday.

Missing Political Vision and an Unfulfilled Pledge

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