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The allegation is a serious one: suggesting Rachel Reeves has misled Britons, scaring them into accepting massive extra taxes that could be used for increased benefits. While hyperbolic, this isn't typical Westminster bickering; on this occasion, the consequences could be damaging. A week ago, detractors of Reeves alongside Keir Starmer were calling their budget "chaotic". Today, it's denounced as lies, and Kemi Badenoch calling for the chancellor's resignation.

Such a serious accusation requires straightforward responses, so here is my assessment. Has the chancellor tell lies? Based on the available evidence, no. There were no blatant falsehoods. However, notwithstanding Starmer's recent comments, that doesn't mean there's no issue here and we should move on. Reeves did mislead the public regarding the factors informing her choices. Was this all to funnel cash towards "welfare recipients", as the Tories claim? Certainly not, as the numbers demonstrate it.

A Reputation Takes Another Blow, But Facts Should Prevail

The Chancellor has taken another hit to her standing, however, should facts still 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, over the unauthorized release of its internal documents will satisfy SW1's thirst for blood.

But the real story is far stranger than media reports indicate, and stretches broader and deeper beyond the careers of Starmer and the 2024 intake. Fundamentally, this is a story concerning how much say you and I get in the governance of the nation. This should concern you.

Firstly, on to Brass Tacks

When the OBR published recently a portion of the forecasts it shared with Reeves while she prepared the budget, the surprise was instant. Not only had the OBR never acted this way before (an "unusual step"), its numbers seemingly went against the chancellor's words. Even as leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Take the Treasury's most "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and other services must be completely paid for by taxes: in late October, the OBR reckoned this would barely be met, albeit by a tiny margin.

Several days later, Reeves gave a press conference so extraordinary it forced morning television to break from its regular schedule. Weeks before the real budget, the country was warned: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, specifically its conclusion suggesting the UK had become less productive, putting more in but yielding less.

And lo! It came to pass. Notwithstanding what Telegraph editorials and Tory media appearances implied recently, that is basically what transpired during the budget, that proved to be big and painful and bleak.

The Misleading Alibi

The way in which Reeves misled us concerned her alibi, because those OBR forecasts did not force her hand. She could have chosen different options; she could have given other reasons, even on budget day itself. Prior to last year's election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it is powerlessness that is evident from Reeves's pre-budget speech. The first Labour chancellor in 15 years portrays herself as an apolitical figure at the mercy of forces beyond her control: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any party would be in this position today, facing the decisions that I face."

She certainly make a choice, only not one Labour wishes to publicize. Starting April 2029 UK workers and businesses are set to be paying an additional £26bn annually in taxes – and most of that will not go towards funding better hospitals, public services, or enhanced wellbeing. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Really Goes

Instead of being spent, over 50% of the additional revenue will instead provide Reeves a buffer for her self-imposed budgetary constraints. 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 tax take will go on actual new spending, such as scrapping the two-child cap 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 could and should have binned it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform along with the entire right-wing media have been barking about the idea that Reeves conforms to the stereotype of Labour chancellors, soaking hard workers to fund shirkers. Labour backbenchers are cheering her budget as a relief to their troubled consciences, safeguarding the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was primarily aimed at investment funds, speculative capital and the others in the financial markets.

Downing Street can make a strong case in its defence. The margins from the OBR were deemed insufficient to feel secure, particularly considering lenders demand from the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan which has way more debt. Combined with our measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue this budget allows the central bank to cut interest rates.

It's understandable that those folk with red rosettes might not couch it in such terms next time they're on the doorstep. According to a consultant for Downing Street puts it, Reeves has "utilised" the bond market to act as a tool of discipline over Labour MPs and the voters. It's the reason the chancellor can't resign, no matter what pledges she breaks. It is also the reason Labour MPs must fall into line and support measures that cut billions from social security, as Starmer promised recently.

A Lack of Statecraft , an Unfulfilled Promise

What is absent here is the notion of statecraft, of mobilising the Treasury and the Bank to reach a fresh understanding with investors. Also absent is any innate understanding of voters,