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This accusation represents a grave matter: that Rachel Reeves has lied to the British public, scaring them into accepting massive extra taxes which could be used for increased welfare payments. While hyperbolic, this is not usual political bickering; on this occasion, the consequences are more serious. Just last week, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "a shambles". Today, it's denounced as falsehoods, with Kemi Badenoch calling for the chancellor to quit.

This serious accusation requires straightforward responses, therefore let me provide my assessment. Has the chancellor tell lies? On the available evidence, no. There were no major untruths. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we can all move along. The Chancellor did mislead the public about the considerations shaping her choices. Was it to funnel cash to "welfare recipients", as the Tories assert? No, as the numbers prove it.

A Standing Sustains Another Blow, But Facts Must Win Out

Reeves has taken another blow to her standing, however, should facts still have anything to do with politics, Badenoch should call off her attack dogs. Maybe the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its own documents will quench SW1's thirst for blood.

Yet the real story is far stranger than the headlines suggest, extending broader and deeper than the careers of Starmer and the class of '24. Fundamentally, herein lies a story concerning how much say the public have in the governance of the nation. And it should worry you.

First, on to Brass Tacks

After the OBR released recently a portion of the projections it shared with Reeves while she wrote the red book, the surprise was immediate. Not merely had the OBR not done such a thing before (an "exceptional move"), its figures apparently contradicted Reeves's statements. Even as leaks from Westminster were about the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Consider the government's so-called "unbreakable" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and the rest would be completely funded by taxes: at the end of October, the watchdog calculated it would just about be met, albeit by a minuscule margin.

A few days later, Reeves held a press conference so unprecedented it forced morning television to break from its usual fare. Several weeks before the actual budget, the nation was warned: taxes would rise, and the main reason cited as pessimistic numbers from the OBR, specifically its conclusion suggesting the UK was less efficient, putting more in but yielding less.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds suggested recently, that is basically what happened during the budget, that proved to be big and painful and bleak.

The Deceptive Justification

The way in which Reeves deceived us was her justification, since those OBR forecasts did not force her hand. She could have chosen other choices; she might have given alternative explanations, even on budget day itself. Before last year's election, Starmer promised precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, and it is a lack of agency that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself to be an apolitical figure at the mercy of factors outside her influence: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any party would be standing here today, confronting the decisions that I face."

She certainly make a choice, only not the kind Labour wishes to broadcast. Starting April 2029 British workers as well as businesses are set to be contributing an additional £26bn annually in taxes – and the majority of this will not be funding improved healthcare, public services, or happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Rather than being spent, more than 50% of this additional revenue will in fact provide Reeves a buffer against her own fiscal rules. Approximately 25% is allocated to covering the government's own U-turns. Reviewing the OBR's calculations and giving maximum benefit of the doubt to Reeves, only 17% of the tax take will fund actual new spending, such as abolishing the limit on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always an act of political theatre by George Osborne. This administration could and should abolished it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have been railing against how Reeves fits the caricature of left-wing finance ministers, soaking strivers to spend on shirkers. Labour backbenchers are applauding her budget for being balm to their troubled consciences, safeguarding the disadvantaged. Each group could be 180-degrees wrong: Reeves's budget was largely aimed at asset managers, speculative capital and the others in the bond markets.

Downing Street can make a compelling argument for itself. The margins provided by the OBR were deemed insufficient for comfort, especially given that bond investors demand from the UK the highest interest rate among G7 developed nations – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries far greater debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan allows the central bank to cut its key lending rate.

It's understandable why those wearing red rosettes might not couch it in such terms next time they visit the doorstep. According to one independent adviser to Downing Street says, Reeves has effectively "utilised" the bond market to act as an instrument of discipline against her own party and the voters. This is why the chancellor cannot resign, regardless of which promises are broken. It's the reason Labour MPs must knuckle down and vote that cut billions from social security, as Starmer indicated recently.

A Lack of Statecraft and a Broken Pledge

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