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The accusation represents a grave matter: suggesting Rachel Reeves has misled UK citizens, scaring them into accepting massive additional taxes which would be spent on higher welfare payments. While exaggerated, this is not usual political sparring; on this occasion, the consequences are more serious. A week ago, detractors of Reeves alongside Keir Starmer were calling their budget "a shambles". Today, it's branded as falsehoods, with Kemi Badenoch calling for Reeves to step down.

Such a grave charge demands straightforward answers, so let me provide my view. Did the chancellor tell lies? Based on current evidence, apparently not. She told no whoppers. But, despite Starmer's recent remarks, it doesn't follow that there's no issue here and we can all move along. Reeves did mislead the public regarding the factors shaping her choices. Was this all to funnel cash towards "welfare recipients", like the Tories assert? No, and the figures prove this.

A Reputation Takes A Further Blow, But Facts Should Prevail

Reeves has taken another blow to her standing, but, if facts still have anything to do with politics, Badenoch should call off her attack dogs. Perhaps the stepping down recently 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.

Yet the true narrative is far stranger than the headlines suggest, and stretches wider and further than the careers of Starmer and his class of '24. Fundamentally, this is an account concerning what degree of influence you and I get over the governance of our own country. This should concern everyone.

Firstly, to the Core Details

After the OBR published recently a portion of the projections it provided to Reeves while she wrote the red book, the shock was immediate. Not merely has the OBR never acted this way before (described as an "exceptional move"), its numbers seemingly went against Reeves's statements. While leaks from Westminster were about how bleak the budget would have to be, the watchdog's predictions were improving.

Take the Treasury's so-called "unbreakable" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest would be completely funded by taxes: in late October, the OBR reckoned it would barely be met, albeit only by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented that it caused morning television to break from its usual fare. Several weeks before the actual budget, the nation was warned: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, specifically its finding that the UK had become less productive, putting more in but yielding less.

And so! It happened. Notwithstanding what Telegraph editorials and Tory broadcast rounds implied over the weekend, this is essentially what happened during the budget, that proved to be significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us concerned her alibi, since these OBR forecasts didn't force her hand. She could have made different options; she might have given alternative explanations, even during the statement. Before the recent election, Starmer pledged precisely this kind of public influence. "The promise of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it's a lack of agency that is evident from Reeves's pre-budget speech. Our first Labour chancellor in 15 years casts herself as a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any party would be standing here today, facing the decisions that I face."

She certainly make a choice, just not one Labour wishes to publicize. From April 2029 UK workers as well as businesses will be paying an additional £26bn a year in tax – but most of that will not be spent on improved healthcare, new libraries, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of this additional revenue will in fact give Reeves a buffer for her self-imposed budgetary constraints. About 25% goes on paying for the administration's U-turns. Examining the OBR's calculations and being as generous as possible to Reeves, a mere 17% of the tax take will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been a bit of political theatre from George Osborne. This administration should have abolished it in its first 100 days.

The Real Target: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have been barking about how Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to fund shirkers. Labour backbenchers are applauding her budget as balm for their troubled consciences, protecting the disadvantaged. Both sides could be 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, speculative capital and the others in the financial markets.

Downing Street could present a strong case for itself. The forecasts from the OBR were insufficient to feel secure, especially given that bond investors demand from the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries way more debt. Coupled with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue their plan enables the central bank to cut its key lending rate.

You can see why those wearing Labour badges might not frame it in such terms next time they're on the doorstep. According to a consultant for Downing Street says, Reeves has "weaponised" the bond market as a tool of discipline against her own party and the voters. This is the reason Reeves can't resign, regardless of which promises she breaks. It's why Labour MPs must fall into line and support measures to take billions off social security, as Starmer promised recently.

Missing Statecraft and an Unfulfilled Promise

What is absent from this is any sense of statecraft, of harnessing the Treasury and the central bank to reach a new accommodation with markets. Missing too is any intuitive knowledge of voters,