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This allegation carries significant weight: that Rachel Reeves has misled Britons, scaring them into accepting massive extra taxes that would be spent on increased welfare payments. However hyperbolic, this isn't typical political bickering; this time, the stakes are higher. Just last week, critics aimed at Reeves and Keir Starmer were labeling their budget "chaotic". Now, it is denounced as lies, with Kemi Badenoch demanding Reeves to step down.

This serious accusation demands straightforward responses, therefore here is my view. Did the chancellor lied? Based on the available information, apparently not. She told no whoppers. But, notwithstanding Starmer's yesterday's comments, it doesn't follow that there is no issue here and we should move on. Reeves did mislead the public regarding the factors informing her decisions. Was it to channel cash towards "benefits street", as the Tories claim? Certainly not, as the figures demonstrate it.

A Standing Takes Another Blow, Yet Truth Should Prevail

Reeves has taken a further hit to her reputation, but, should facts still have anything to do with politics, Badenoch should call off her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's thirst for blood.

Yet the true narrative is far stranger than media reports suggest, and stretches wider and further beyond the careers of Starmer and his 2024 intake. At its heart, this is a story about how much say you and I have in the running of our own country. This should concern you.

Firstly, on to Brass Tacks

After the OBR released recently some of the projections it provided to Reeves as she prepared the budget, the surprise was immediate. Not only has the OBR never acted this way before (described as an "exceptional move"), its figures seemingly contradicted Reeves's statements. While rumors from Westminster were about how bleak the budget was going to be, the watchdog's predictions were getting better.

Take the government's so-called "iron-clad" rule, stating by 2030 day-to-day spending for hospitals, schools, and other services would be wholly funded by taxes: at the end of October, the watchdog calculated it would just about be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented that it caused breakfast TV to interrupt its regular schedule. Weeks before the real budget, the country was put on alert: taxes were going up, and the primary cause being gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK had become less productive, investing more but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials and Tory media appearances implied recently, this is essentially what happened at the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

Where Reeves deceived us was her alibi, since those OBR forecasts didn't compel her actions. She might have chosen other choices; she could have given alternative explanations, including on budget day itself. Prior to the recent election, Starmer promised 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 in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be a technocrat at the mercy of forces beyond her control: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She certainly make decisions, just not the kind Labour cares to broadcast. From April 2029 UK workers and businesses will be paying another £26bn annually in taxes – and the majority of this will not be spent on better hospitals, new libraries, nor happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Rather than going on services, more than 50% of the additional revenue will instead provide Reeves cushion against her own budgetary constraints. About 25% goes on covering the government's own U-turns. Examining the watchdog's figures and being as generous as possible to a Labour chancellor, a mere 17% of the taxes will go on genuinely additional spending, for example scrapping 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. This administration should have have binned it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform along with all of Blue Pravda have spent days barking about how Reeves conforms to the caricature of Labour chancellors, taxing hard workers to fund the workshy. Party MPs are applauding her budget for being balm to their troubled consciences, safeguarding the disadvantaged. Both sides are 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, speculative capital and the others in the financial markets.

Downing Street could present a compelling argument for itself. The margins from the OBR were too small to feel secure, especially considering bond investors demand from the UK the greatest borrowing cost of all G7 developed nations – higher than France, that recently lost its leader, higher than Japan that carries way more debt. Combined with our measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget enables the central bank to reduce interest rates.

It's understandable that those folk with Labour badges may choose not to couch it in such terms next time they visit the doorstep. As a consultant to Downing Street says, Reeves has "utilised" the bond market to act as an instrument of discipline against her own party and the voters. This is the reason Reeves can't resign, no matter what pledges are broken. It's why Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer promised 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 reach a fresh understanding with markets. Missing too is any intuitive knowledge of voters,