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This charge represents a grave matter: that Rachel Reeves may have deceived UK citizens, scaring them to accept massive additional taxes which would be used for higher benefits. However exaggerated, this isn't typical Westminster sparring; on this occasion, the consequences are more serious. A week ago, detractors aimed at Reeves and Keir Starmer were calling their budget "chaotic". Now, it's branded as lies, with Kemi Badenoch calling for Reeves to step down.

Such a serious accusation requires clear answers, so let me provide my assessment. Did the chancellor lied? Based on current evidence, no. She told no major untruths. However, despite Starmer's recent comments, that doesn't mean there's nothing to see and we can all move along. The Chancellor did misinform the public about the considerations informing her choices. Was this all to channel cash to "benefits street", as the Tories assert? Certainly not, as the figures demonstrate it.

A Standing Sustains Another Hit, But Facts Should Win Out

Reeves has sustained another blow to her standing, but, if facts still matter in politics, Badenoch ought to stand down her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its own documents will quench Westminster's appetite for scandal.

Yet the true narrative is much more unusual compared to the headlines indicate, extending wider and further than the careers of Starmer and his 2024 intake. At its heart, this is a story concerning how much say the public have in the running of the nation. This should concern everyone.

Firstly, on to Brass Tacks

After the OBR released last Friday some of the projections it shared with Reeves as she wrote the red book, the surprise was immediate. Not merely had the OBR not acted this way before (described as an "unusual step"), its numbers apparently contradicted the chancellor's words. While leaks from Westminster were about the grim nature of the budget was going to be, the OBR's own predictions were getting better.

Consider the Treasury's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and the rest would be wholly paid for by taxes: at the end of October, the watchdog calculated this would barely be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced breakfast TV to break from its usual fare. Several weeks before the real budget, the nation was warned: taxes would rise, and the main reason being gloomy numbers provided by the OBR, in particular its finding suggesting the UK had become less productive, putting more in but getting less out.

And so! It came to pass. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested recently, this is essentially what transpired during the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves misled us was her justification, because those OBR forecasts did not compel her actions. She might have made different options; she could have given other reasons, including on budget day itself. Before the recent election, Starmer promised exactly such people power. "The promise of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it's powerlessness that jumps out from Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the decisions that I face."

She certainly make decisions, just not one the Labour party cares to broadcast. From April 2029 UK workers as well as businesses will be paying an additional £26bn a year in taxes – but the majority of this will not go towards spent on better hospitals, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Money Really Goes

Instead of being spent, over 50% of the extra cash will in fact provide Reeves cushion against her self-imposed budgetary constraints. About 25% goes on covering the administration's U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt towards Reeves, only 17% of the tax take will fund genuinely additional spending, for example abolishing the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always a bit of political theatre by George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform along with all of Blue Pravda have been barking about how Reeves fits the stereotype of Labour chancellors, soaking strivers to fund the workshy. Party MPs have been applauding her budget as balm for their social concerns, safeguarding the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, hedge funds and the others in the bond markets.

Downing Street can make a compelling argument for itself. The forecasts provided by the OBR were deemed insufficient to feel secure, especially considering bond investors charge the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan which has way more debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the central bank to cut interest rates.

It's understandable why those wearing Labour badges may choose not to couch it in such terms next time they visit the doorstep. As one independent adviser for Downing Street puts it, Reeves has effectively "weaponised" the bond market as a tool of discipline over Labour MPs and the voters. This is why the chancellor cannot resign, regardless of which pledges she breaks. It is also why Labour MPs will have to knuckle down and vote that cut billions from social security, as Starmer indicated yesterday.

A Lack of Statecraft and a Broken Pledge

What's missing from this is the notion of strategic governance, of harnessing the Treasury and the Bank to forge a fresh understanding with markets. Also absent is any innate understanding of voters,