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The charge carries significant weight: that Rachel Reeves may have lied to the British public, scaring them into accepting billions in additional taxes which would be spent on higher benefits. However hyperbolic, this is not usual Westminster sparring; this time, the stakes are higher. Just last week, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "chaotic". Now, it is branded as lies, with Kemi Badenoch calling for the chancellor's resignation.

Such a grave accusation demands straightforward answers, so here is my assessment. Did the chancellor lied? On the available information, no. She told no major untruths. But, despite Starmer's yesterday's remarks, that doesn't mean there is nothing to see and we should move on. The Chancellor did misinform the public regarding the factors shaping her choices. Was it to channel cash to "benefits street", as the Tories assert? No, as the figures prove it.

A Standing Sustains Another Blow, Yet Truth Must Prevail

The Chancellor has taken a further hit to her standing, but, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's appetite for scandal.

But the true narrative is much more unusual compared to the headlines suggest, extending wider and further than the careers of Starmer and his 2024 intake. Fundamentally, herein lies a story concerning what degree of influence the public get in the running of the nation. This should should worry you.

First, on to Brass Tacks

When the OBR published recently a portion of the projections it shared with Reeves while she prepared the budget, the shock was immediate. Not merely has the OBR not done such a thing before (described as an "rare action"), its numbers seemingly went against Reeves's statements. Even as rumors from Westminster suggested the grim nature of the budget would have to be, the OBR's own forecasts were getting better.

Consider the government's most "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 OBR calculated this would barely be met, albeit only by a tiny margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to interrupt its regular schedule. Several weeks prior to the real budget, the country was warned: taxes would rise, and the primary cause cited as gloomy numbers provided by the OBR, specifically its finding suggesting the UK had become less productive, investing more but yielding less.

And lo! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is basically what transpired at the budget, which was significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves misled us was her alibi, since these OBR forecasts didn't compel her actions. She might have made different options; she might have provided other reasons, including on budget day itself. Prior to the recent election, Starmer pledged exactly such public influence. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it's powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years casts herself as a technocrat buffeted by forces beyond her control: "In the context of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, just not the kind the Labour party cares to broadcast. Starting April 2029 UK 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 funding improved healthcare, public services, nor enhanced wellbeing. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Instead of being spent, over 50% of this additional revenue will instead provide Reeves cushion against her self-imposed fiscal rules. About 25% goes on paying for the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible towards Reeves, only 17% of the tax take will go on actual new spending, such as abolishing the two-child cap on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. A Labour government could and should abolished it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and all of Blue Pravda have spent days railing against how Reeves conforms to the caricature of Labour chancellors, taxing strivers to spend on shirkers. Labour backbenchers have been applauding her budget for being balm for their social concerns, protecting the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was primarily aimed at investment funds, hedge funds and the others in the financial markets.

Downing Street can make a compelling argument in its defence. The forecasts from the OBR were deemed insufficient to feel secure, particularly given that bond investors charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, which lost a prime minister, higher than Japan that carries way more debt. Combined with our policies to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the central bank to reduce its key lending rate.

You can see that those wearing Labour badges may choose not to frame it in such terms next time they visit #Labourdoorstep. As a consultant to Downing Street says, Reeves has "weaponised" the bond market to act as a tool of discipline against Labour MPs and the electorate. It's why the chancellor can't resign, regardless of which pledges she breaks. It's the reason Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer indicated yesterday.

A Lack of Statecraft and a Broken Pledge

What's missing here is any sense of statecraft, of mobilising the Treasury and the central bank to forge a fresh understanding with markets. Missing too is innate understanding of voters,