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This allegation represents a grave matter: suggesting Rachel Reeves has lied to Britons, scaring them into accepting billions in extra taxes that could be spent on higher benefits. However exaggerated, this isn't usual Westminster bickering; on this occasion, the stakes could be damaging. A week ago, detractors of Reeves and Keir Starmer were calling their budget "uncoordinated". Today, it's branded as lies, with Kemi Badenoch calling for the chancellor to quit.

Such a serious accusation demands straightforward answers, so here is my assessment. Did the chancellor been dishonest? On current evidence, apparently not. There were no blatant falsehoods. But, notwithstanding Starmer's yesterday's remarks, that doesn't mean there's no issue here and we should move on. The Chancellor did misinform the public regarding the considerations shaping her choices. Was this all to channel cash to "welfare recipients", as the Tories claim? No, as the figures prove it.

A Standing Takes A Further Blow, But Facts Should Prevail

The Chancellor has taken a further blow to her reputation, however, should facts still have anything to do with politics, Badenoch should stand down her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's thirst for blood.

Yet the true narrative is far stranger than media reports indicate, and stretches broader and deeper than the political futures of Starmer and the class of '24. At its heart, herein lies an account about how much say the public have in the governance of the nation. This should concern you.

Firstly, on to the Core Details

When the OBR released recently a portion of the projections it shared with Reeves as she prepared the red book, the surprise was immediate. Not merely has the OBR not acted this way before (described as an "unusual step"), its numbers apparently contradicted the chancellor's words. Even as rumors from Westminster suggested how bleak the budget would have to be, the OBR's own forecasts were getting better.

Consider the government's most "iron-clad" fiscal rule, stating by 2030 daily spending on hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the watchdog calculated this would just about be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so extraordinary that it caused breakfast TV to break from its regular schedule. Weeks prior to the actual budget, the nation was warned: taxes were going up, and the main reason cited as gloomy numbers from the OBR, in particular its conclusion suggesting the UK had become less efficient, investing more but yielding less.

And so! It came to pass. Despite what Telegraph editorials and Tory media appearances implied recently, that is essentially what transpired at the budget, which was significant, harsh, and grim.

The Deceptive Alibi

Where Reeves deceived us was her alibi, since those OBR forecasts did not compel her actions. She could have made different options; she could have provided other reasons, including on budget day itself. Prior to the recent election, Starmer promised precisely this kind of public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, yet it is a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself to be a technocrat at the mercy of forces beyond her control: "In the context of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, confronting the choices that I face."

She certainly make a choice, just not one the Labour party cares to publicize. From April 2029 British workers as well as businesses will be paying an additional £26bn a year in taxes – and most of that will not be funding better hospitals, new libraries, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Rather than going on services, more than 50% of the extra cash will instead give Reeves cushion against her self-imposed budgetary constraints. About 25% is allocated to paying for the government's own U-turns. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the taxes will fund genuinely additional spending, such as abolishing the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always a bit of political theatre from George Osborne. This administration should have abolished it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform along with all of Blue Pravda have been railing against how Reeves conforms to the stereotype of Labour chancellors, soaking strivers to fund shirkers. Party MPs have been cheering her budget as balm for their social concerns, safeguarding the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was largely aimed at investment funds, speculative capital and the others in the bond markets.

The government can make a compelling argument in its defence. The forecasts provided by the OBR were deemed too small for comfort, especially considering bond investors demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost its leader, and exceeding Japan that carries far greater debt. Combined with our measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the central bank to reduce interest rates.

You can see that those folk with Labour badges might not couch it this way next time they're on the doorstep. As one independent adviser for Downing Street says, Reeves has "weaponised" financial markets as a tool of control over her own party and the voters. This is why Reeves can't resign, regardless of which promises she breaks. It is also the reason Labour MPs must fall into line and support measures to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft and an Unfulfilled Pledge

What is absent here is the notion of statecraft, of mobilising the finance ministry and the central bank to reach a fresh understanding with markets. Missing too is innate understanding of voters,