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The charge represents a grave matter: that Rachel Reeves has deceived Britons, frightening them to accept billions in extra taxes which would be used for higher welfare payments. However exaggerated, this isn't usual Westminster sparring; this time, the consequences are higher. Just last week, critics aimed at Reeves and Keir Starmer were calling their budget "a mess". Today, it is denounced as falsehoods, with Kemi Badenoch calling for Reeves to step down.

This grave accusation demands straightforward responses, therefore let me provide my view. Did the chancellor tell lies? Based on the available information, no. She told no whoppers. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is no issue here and we should move on. The Chancellor did misinform the public regarding the considerations informing her choices. Was it to funnel cash towards "welfare recipients", like the Tories claim? Certainly not, and the figures demonstrate it.

A Standing Sustains Another Blow, But Facts Must Prevail

The Chancellor has sustained another blow to her standing, but, should facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

But the real story is much more unusual compared to the headlines indicate, extending broader and deeper than the political futures of Starmer and the class of '24. At its heart, this is a story about what degree of influence the public get over the governance of the nation. And it concern you.

Firstly, on to Brass Tacks

When the OBR published last Friday a portion of the forecasts it provided to Reeves as she prepared the budget, the surprise was instant. Not only had the OBR not acted this way before (an "rare action"), its figures apparently went against the chancellor's words. Even as rumors from Westminster were about how bleak the budget would have to be, the watchdog's predictions were getting better.

Consider the government's most "unbreakable" fiscal rule, that by 2030 daily spending on hospitals, schools, and the rest must be completely paid for by taxes: in late October, the OBR calculated this would barely be met, albeit by a tiny margin.

Several days later, Reeves held a media briefing so extraordinary it forced breakfast TV to interrupt its regular schedule. Several weeks before the actual budget, the nation was put on alert: taxes would rise, with the main reason cited as gloomy numbers from the OBR, in particular its conclusion suggesting the UK had become less efficient, investing more but getting less out.

And so! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances implied over the weekend, that is basically what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

The way in which Reeves misled us was her justification, because these OBR forecasts didn't force her hand. She could have chosen other choices; she might have provided other reasons, including on budget day itself. Before last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it is powerlessness that jumps out from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be a technocrat at the mercy of factors beyond her control: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any political stripe would be in this position today, facing the choices that I face."

She did make decisions, only not one Labour wishes to broadcast. Starting April 2029 UK workers and businesses are set to be paying another £26bn a year in tax – but most of that will not go towards spent on better hospitals, public services, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "benefits street".

Where the Money Actually Ends Up

Instead of being spent, more than 50% of this extra cash will instead provide Reeves cushion against her self-imposed budgetary constraints. Approximately 25% is allocated to covering the government's own U-turns. Examining the watchdog's figures and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the tax take will fund actual new spending, for example abolishing the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it was always an act of political theatre from George Osborne. A Labour government should have have binned it in its first 100 days.

The True Audience: The Bond Markets

Conservatives, Reform and the entire right-wing media have spent days railing against the idea that Reeves conforms to the stereotype of Labour chancellors, taxing strivers to fund shirkers. Labour backbenchers are applauding her budget for being balm for their troubled consciences, safeguarding the disadvantaged. Both sides are 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and participants within the bond markets.

Downing Street can make a strong case for itself. The forecasts provided by the OBR were too small to feel secure, especially given that lenders demand from the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, that recently lost its leader, higher than Japan that carries way more debt. Coupled with our measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue this budget enables the central bank to cut its key lending rate.

It's understandable why those wearing red rosettes may choose not to frame it this way next time they're on the doorstep. According to one independent adviser for Downing Street says, Reeves has effectively "utilised" financial markets to act as an instrument of control over her own party and the electorate. This is the reason the chancellor cannot resign, no matter what promises are broken. It's why Labour MPs will have to fall into line and support measures to take billions off social security, just as Starmer promised yesterday.

Missing Statecraft , a Broken Pledge

What is absent from this is any sense of strategic governance, of mobilising the finance ministry and the Bank to reach a new accommodation with investors. Missing too is intuitive knowledge of voters,