The allegation represents a grave matter: that Rachel Reeves may have lied to the British public, frightening them into accepting massive additional taxes which would be spent on increased benefits. While exaggerated, this isn't usual political sparring; this time, the consequences are more serious. Just last week, detractors of Reeves and Keir Starmer had been calling their budget "a mess". Now, it is denounced as lies, and Kemi Badenoch demanding the chancellor to quit.
This grave accusation requires clear responses, so here is my view. Did the chancellor lied? On current evidence, apparently not. There were no major untruths. However, despite Starmer's yesterday's comments, that doesn't mean there's nothing to see and we should move on. Reeves did misinform the public about the considerations shaping her decisions. Was it to channel cash towards "welfare recipients", as the Tories claim? No, as the figures demonstrate this.
The Chancellor has sustained a further blow to her standing, however, if facts still have anything to do with politics, Badenoch ought to 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 quench SW1's thirst for blood.
Yet the true narrative is far stranger than the headlines suggest, extending wider and further beyond the careers of Starmer and his class of '24. At its heart, this is an account concerning what degree of influence you and I have in the governance of our own country. And it concern everyone.
After the OBR published recently a portion of the forecasts it shared with Reeves as she prepared the red book, the shock was instant. Not merely has the OBR never acted this way before (an "exceptional move"), its figures apparently went against Reeves's statements. Even as leaks from Westminster suggested how bleak the budget would have to be, the watchdog's predictions were improving.
Take the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest would 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 press conference so unprecedented it forced breakfast TV to interrupt its regular schedule. Several weeks before the actual budget, the country was put on alert: taxes would rise, with the primary cause cited as gloomy numbers from the OBR, in particular its conclusion that the UK was less efficient, investing more but getting less out.
And so! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds implied recently, this is basically what happened at the budget, that proved to be significant, harsh, and grim.
The way in which Reeves misled us was her alibi, because these OBR forecasts did not compel her actions. She might have made different options; she might have provided alternative explanations, including on budget day itself. Before last year's election, Starmer promised precisely this kind of public influence. "The promise of democracy. The strength of the vote. The possibility for national renewal."
One year later, yet it's powerlessness that is evident from Reeves's breakfast speech. The first Labour chancellor in 15 years portrays herself to be an apolitical figure at the mercy of factors beyond her control: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."
She did make decisions, only not the kind the Labour party wishes to broadcast. Starting April 2029 British workers as well as businesses are set to be paying an additional £26bn a year in taxes – and most of that will not go towards spent on better hospitals, new libraries, or happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".
Rather than being spent, over 50% of the extra cash will instead give Reeves cushion for her self-imposed budgetary constraints. Approximately 25% goes on covering the government's own U-turns. Reviewing the watchdog's figures and being as generous as possible to Reeves, a mere 17% of the taxes will go on genuinely additional spending, for example abolishing the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it had long been a bit of political theatre from George Osborne. A Labour government should have abolished it immediately upon taking office.
The Tories, Reform along with all of right-wing media have been barking about the idea that Reeves fits the caricature of left-wing finance ministers, soaking hard workers to fund shirkers. Party MPs have been applauding her budget for being a relief to their social concerns, safeguarding the most vulnerable. Both sides could be completely mistaken: The Chancellor's budget was primarily aimed at asset managers, hedge funds and the others in the bond markets.
Downing Street could present a compelling argument in its defence. The forecasts provided by the OBR were insufficient for comfort, especially considering lenders demand from the UK the highest interest rate of all G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan that carries far greater debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan allows the Bank of England to cut its key lending rate.
You can see that those folk with Labour badges might not couch it this way next time they're on the doorstep. According to one independent adviser to Downing Street says, Reeves has "weaponised" the bond market as a tool of control over her own party and the electorate. It's why the chancellor cannot resign, no matter what pledges she breaks. It's why Labour MPs will have to knuckle down and vote that cut billions from social security, as Starmer indicated yesterday.
What's missing from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to forge a fresh understanding with markets. Missing too is innate understanding of voters,
A seasoned software engineer with a passion for open-source projects and tech education.
