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The charge is a serious one: that Rachel Reeves may have lied to the British public, scaring them into accepting billions in additional taxes which could be used for increased welfare payments. While hyperbolic, this isn't typical Westminster bickering; this time, the consequences are higher. Just last week, detractors of Reeves and Keir Starmer had been labeling their budget "uncoordinated". Now, it's denounced as lies, and Kemi Badenoch calling for Reeves to step down.

Such a grave accusation demands straightforward responses, therefore let me provide my assessment. Has the chancellor tell lies? Based on the available information, apparently not. She told no whoppers. However, despite Starmer's yesterday's remarks, that doesn't mean there is no issue here and we can all move along. The Chancellor did mislead the public regarding the considerations informing her choices. Was it to funnel cash towards "benefits street", like the Tories assert? Certainly not, and the numbers prove this.

A Reputation Takes A Further Blow, But Facts Should Prevail

Reeves has taken another hit to her reputation, but, if facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

But the real story is much more unusual compared to media reports suggest, and stretches broader and deeper beyond the careers of Starmer and his class of '24. Fundamentally, herein lies an account concerning how much say the public have over the running of the nation. This should concern everyone.

Firstly, on to Brass Tacks

When the OBR released last Friday a portion of the projections it shared with Reeves while she prepared the budget, the surprise was instant. Not merely has the OBR never done such a thing before (an "rare action"), its figures seemingly contradicted the chancellor's words. Even as leaks from Westminster were about how bleak the budget was going to be, the OBR's own predictions were improving.

Consider the Treasury's most "unbreakable" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be completely paid for by taxes: in late October, the watchdog reckoned this would just about be met, albeit by a tiny margin.

A few days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to break from its usual fare. Weeks prior to the real budget, the nation was put on alert: taxes would rise, with the main reason cited as gloomy numbers from the OBR, specifically its conclusion that the UK was less productive, putting more in but getting less out.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances suggested recently, that is essentially what transpired during the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us was her justification, since these OBR forecasts did not force her hand. She might have chosen different options; she could have given alternative explanations, including during the statement. Before the recent election, Starmer pledged exactly such public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it is powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself to be an apolitical figure buffeted by factors outside her influence: "In the context of the persistent challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She certainly make a choice, only not one Labour wishes to publicize. From April 2029 British workers as well as businesses will be contributing another £26bn annually in taxes – but most of that will not go towards funding improved healthcare, public services, nor enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of the extra cash will instead provide Reeves cushion for her self-imposed fiscal rules. About 25% goes on covering the government's own policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt to Reeves, a mere 17% of the tax take will go on actual new spending, for example abolishing the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, because it was always a bit of political theatre from George Osborne. A Labour government should have have binned it in its first 100 days.

The Real Target: The Bond Markets

Conservatives, Reform along with all of Blue Pravda have spent days barking about how Reeves conforms to the stereotype of Labour chancellors, taxing strivers to fund shirkers. Party MPs have been cheering her budget for being a relief to their social concerns, protecting the disadvantaged. Both sides could be 180-degrees wrong: The Chancellor's budget was largely targeted towards asset managers, speculative capital and participants within the financial markets.

The government can make a compelling argument for itself. The margins provided by the OBR were too small for comfort, particularly considering lenders demand from the UK the greatest borrowing cost of all G7 developed nations – higher than France, which lost a prime minister, higher than Japan that carries way more debt. Coupled with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the Bank of England to reduce interest rates.

You can see that those folk with red rosettes might not couch it this way next time they're on #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has effectively "utilised" financial markets as a tool of discipline against her own party and the electorate. It's the reason the chancellor can't resign, regardless of which promises she breaks. It's the reason Labour MPs must knuckle down and vote to take billions off social security, just as Starmer promised yesterday.

A Lack of Statecraft and an Unfulfilled Promise

What is absent from this is the notion of statecraft, of harnessing the finance ministry and the central bank to reach a new accommodation with investors. Also absent is any innate understanding of voters,