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The charge represents a grave matter: that Rachel Reeves has misled Britons, frightening them into accepting billions in additional taxes which could be spent on higher benefits. However exaggerated, this isn't usual political bickering; on this occasion, the consequences are more serious. Just last week, critics of Reeves and Keir Starmer had been calling their budget "uncoordinated". Today, it is branded as lies, with Kemi Badenoch calling for Reeves to step down.

Such a serious charge requires clear answers, so let me provide my assessment. Has the chancellor tell lies? Based on the available information, apparently not. There were no whoppers. However, despite Starmer's recent comments, that doesn't mean there is nothing to see and we can all move along. The Chancellor did mislead the public regarding the factors shaping her decisions. Was it to channel cash towards "welfare recipients", like the Tories claim? Certainly not, and the figures prove it.

A Reputation Sustains Another Hit, But Facts Must Prevail

Reeves has sustained a further blow to her standing, but, should facts still have anything to do with politics, Badenoch ought to stand down her lynch mob. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will quench SW1's appetite for scandal.

Yet the true narrative is much more unusual compared to the headlines indicate, extending broader and deeper than the political futures of Starmer and his 2024 intake. At its heart, herein lies a story concerning what degree of influence the public have in the running of our own country. This should should worry everyone.

First, to Brass Tacks

After the OBR published last Friday a portion of the forecasts it shared with Reeves as she wrote the budget, the surprise was immediate. Not merely had the OBR not acted this way before (described as an "unusual step"), its numbers seemingly went against the chancellor's words. While rumors from Westminster suggested how bleak the budget would have to be, the OBR's own predictions were improving.

Consider the Treasury's most "unbreakable" rule, that by 2030 daily spending on hospitals, schools, and the rest would be wholly paid for by taxes: in late October, the OBR calculated this would barely be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented that it caused morning television to interrupt its regular schedule. Weeks before the real budget, the nation was warned: taxes were going up, and the main reason being pessimistic numbers from the OBR, specifically its finding suggesting the UK had become less productive, investing more but getting less out.

And so! It happened. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested recently, that is essentially what transpired at the budget, which was big and painful and bleak.

The Deceptive Justification

The way in which Reeves deceived us was her alibi, since these OBR forecasts did not force her hand. She could have chosen different options; she could have provided other reasons, including on budget day itself. Prior to the recent election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, yet it's powerlessness that jumps out from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself as an apolitical figure at the mercy of forces outside her influence: "In the context of the long-term challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the decisions that I face."

She certainly make decisions, only not the kind the Labour party cares to publicize. Starting April 2029 UK workers as well as businesses will be contributing another £26bn annually in tax – but the majority of this will not go towards spent on improved healthcare, new libraries, or happier lives. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Rather than going on services, over 50% of the additional revenue will instead provide Reeves a buffer for her self-imposed budgetary constraints. Approximately 25% goes on covering the administration's policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt to Reeves, a mere 17% of the tax take will go on genuinely additional spending, for example abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it had long been a bit of political theatre from George Osborne. A Labour government could and should have binned it immediately upon taking office.

The True Audience: Financial Institutions

Conservatives, Reform and the entire Blue Pravda have been railing against the idea that Reeves fits the caricature of left-wing finance ministers, soaking strivers to spend on shirkers. Labour backbenchers have been applauding her budget for being a relief to their troubled consciences, safeguarding the disadvantaged. Both sides are 180-degrees wrong: The Chancellor's budget was primarily aimed at investment funds, hedge funds and the others in the bond markets.

Downing Street can make a strong case in its defence. The forecasts provided by the OBR were too small for comfort, particularly given that bond investors charge the UK the highest interest rate among G7 developed nations – exceeding that of France, that recently lost a prime minister, higher than Japan which has way more debt. Combined with the measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the Bank of England to reduce its key lending rate.

You can see that those wearing Labour badges may choose not to couch it this way next time they visit #Labourdoorstep. According to one independent adviser to Downing Street says, Reeves has effectively "weaponised" financial markets as an instrument of control over her own party and the voters. This is why Reeves cannot resign, regardless of which pledges she breaks. It is also why Labour MPs must fall into line and support measures that cut billions from social security, just as Starmer indicated yesterday.

Missing Statecraft , an Unfulfilled Promise

What's missing from this is the notion of statecraft, of mobilising the Treasury and the Bank to reach a fresh understanding with markets. Missing too is any intuitive knowledge of voters,