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The accusation represents a grave matter: suggesting Rachel Reeves may have misled UK citizens, frightening them into accepting massive extra taxes which would be funneled into increased benefits. While exaggerated, this isn't usual Westminster sparring; on this occasion, the consequences are higher. Just last week, critics of Reeves alongside Keir Starmer had been calling their budget "uncoordinated". Today, it is branded as falsehoods, and Kemi Badenoch calling for Reeves to step down.

This serious charge requires clear answers, therefore here is my view. Has the chancellor lied? On current evidence, apparently not. She told no whoppers. However, despite Starmer's recent comments, that doesn't mean there's nothing to see and we should move on. The Chancellor did mislead the public regarding the factors informing her choices. Was it to funnel cash to "benefits street", as the Tories assert? Certainly not, and the figures demonstrate this.

A Standing Sustains Another Hit, But Facts Should Win Out

The Chancellor has taken a further hit to her reputation, but, should facts still have anything to do with politics, Badenoch should call off her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

But the real story is much more unusual compared to the headlines suggest, extending broader and deeper beyond the political futures of Starmer and his class of '24. At its heart, herein lies an account about how much say the public have in the running of the nation. This should should worry you.

Firstly, to Brass Tacks

When the OBR released recently some of the forecasts it shared with Reeves as she prepared the red book, the shock was immediate. Not only has the OBR never done such a thing before (an "rare action"), its numbers seemingly went against Reeves's statements. While rumors from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were getting better.

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

Several days later, Reeves held a media briefing so unprecedented it forced morning television to interrupt its regular schedule. Several weeks before the real budget, the country was warned: taxes were going up, and the main reason being pessimistic numbers from the OBR, in particular its conclusion that the UK had become less productive, investing more but getting less out.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is basically what happened at the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

The way in which Reeves deceived us concerned her justification, since those OBR forecasts didn't force her hand. She might have made different options; she might have given other reasons, even during the statement. Prior to the recent election, Starmer pledged exactly such people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it's a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by factors beyond her control: "In the context of the long-term challenges with our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She certainly make a choice, only not the kind the Labour party cares to broadcast. Starting April 2029 UK workers and businesses will be paying another £26bn annually in taxes – but most of that will not go towards funding improved healthcare, new libraries, nor enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of the additional revenue will instead give Reeves a buffer against her own fiscal rules. About 25% goes on paying for the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the taxes will fund actual new spending, for example abolishing the two-child cap on child benefit. Removing it "will cost" the Treasury only £2.5bn, because it had long been a bit of political theatre from George Osborne. This administration could and should have binned it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, 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 strivers to spend on the workshy. Labour backbenchers are cheering her budget for being a relief for their social concerns, protecting the most vulnerable. Both sides are completely mistaken: Reeves's budget was largely aimed at asset managers, hedge funds and participants within the financial markets.

Downing Street can make a compelling argument in its defence. The margins from the OBR were deemed too small for comfort, especially given that lenders charge the UK the highest interest rate of all G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan which has way more debt. Coupled with the policies to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan allows the central bank to cut interest rates.

It's understandable that those folk with Labour badges might not couch it in such terms next time they visit the doorstep. As a consultant to Downing Street says, Reeves has effectively "weaponised" financial markets to act as a tool of discipline against her own party and the voters. This is the reason Reeves can't resign, regardless of which pledges are broken. It's the reason Labour MPs will have to fall into line and support measures that cut billions from social security, as Starmer indicated recently.

A Lack of Statecraft and an Unfulfilled Pledge

What is absent from this is the notion of statecraft, of harnessing the finance ministry and the Bank to reach a fresh understanding with investors. Missing too is any innate understanding of voters,