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The allegation is a serious one: suggesting Rachel Reeves may have deceived UK citizens, scaring them to accept massive additional taxes that would be used for higher welfare payments. While exaggerated, this isn't usual Westminster sparring; on this occasion, the stakes are more serious. Just last week, detractors aimed at Reeves and Keir Starmer were labeling their budget "chaotic". Now, it is denounced as falsehoods, with Kemi Badenoch demanding Reeves to step down.

This grave charge requires straightforward answers, so here is my assessment. Did the chancellor been dishonest? Based on current evidence, apparently not. She told no blatant falsehoods. However, notwithstanding Starmer's recent comments, it doesn't follow that there is no issue here and we should move on. Reeves did misinform the public regarding the considerations informing her choices. Was it to funnel cash towards "benefits street", like the Tories assert? No, and the numbers demonstrate it.

A Standing Sustains Another Hit, But Facts Must Prevail

Reeves has sustained another hit to her reputation, however, if facts still matter in politics, Badenoch should call off her attack dogs. Perhaps the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy SW1's thirst for blood.

But the true narrative is far stranger than the headlines indicate, and stretches wider and further beyond the careers of Starmer and the 2024 intake. At its heart, this is an account about what degree of influence the public have over the governance of the nation. This should should worry everyone.

First, to Brass Tacks

When the OBR published recently some of the forecasts it provided to Reeves while she prepared the budget, the surprise was instant. Not merely has the OBR not acted this way before (described as an "exceptional move"), its figures apparently contradicted the chancellor's words. Even as leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were improving.

Take the Treasury's most "iron-clad" rule, stating by 2030 daily spending for hospitals, schools, and the rest must be wholly funded by taxes: at the end of October, the OBR reckoned this would just about be met, albeit by a tiny margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to interrupt its usual fare. Weeks before the actual budget, the nation was warned: taxes would rise, and the main reason cited as gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, putting more in but yielding less.

And so! It happened. Despite what Telegraph editorials combined with Tory media appearances implied recently, that is essentially what transpired during the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us concerned her alibi, because these OBR forecasts didn't force her hand. She could have chosen different options; she might have given alternative explanations, including during the statement. Prior to last year's election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, and it's a lack of agency that is evident in Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself to be a technocrat at the mercy of factors beyond her control: "In the context of the persistent challenges on our productivity … any chancellor of any party would be standing here today, confronting the decisions that I face."

She did make a choice, only not one Labour cares to publicize. From April 2029 British workers and businesses will be paying an additional £26bn a year in taxes – but most of that will not be funding improved healthcare, public services, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Money Really Goes

Instead of being spent, over 50% of this additional revenue will in fact provide Reeves cushion for her own budgetary constraints. Approximately 25% is allocated to covering the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, a mere 17% of the tax take will fund actual new spending, such as scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it had long been a bit of political theatre from George Osborne. A Labour government could and should abolished it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have been railing against the idea that Reeves conforms to the caricature of left-wing finance ministers, soaking strivers to fund shirkers. Labour backbenchers have been applauding her budget for being balm to their troubled consciences, safeguarding the disadvantaged. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily aimed at asset managers, hedge funds and the others in the bond markets.

The government can make a compelling argument for itself. The forecasts provided by the OBR were deemed insufficient for comfort, especially given that lenders charge the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, which lost its leader, and exceeding Japan that carries far greater debt. Coupled with our policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the central bank to cut its key lending rate.

You can see why those folk with Labour badges might not frame it in such terms when they're on the doorstep. As one independent adviser to Downing Street puts it, Reeves has "weaponised" the bond market as a tool of discipline against her own party and the voters. This is why Reeves cannot resign, regardless of which pledges are broken. It's the reason Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer indicated recently.

Missing Political Vision and a Broken Promise

What is absent from this is the notion of strategic governance, of harnessing the finance ministry and the central bank to reach a new accommodation with markets. Missing too is any innate understanding of voters,