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This allegation represents a grave matter: that Rachel Reeves has misled UK citizens, scaring them into accepting massive additional taxes which would be used for higher benefits. While exaggerated, this is not typical political sparring; on this occasion, the stakes are more serious. A week ago, detractors aimed at Reeves and Keir Starmer had been labeling their budget "a shambles". Today, it's denounced as lies, with Kemi Badenoch demanding the chancellor to quit.

Such a grave accusation requires clear answers, so let me provide my assessment. Has the chancellor lied? On current information, apparently not. There were no blatant falsehoods. However, notwithstanding Starmer's recent comments, it doesn't follow that there's nothing to see and we can all move along. Reeves did misinform the public regarding the considerations informing her decisions. Was it to channel cash towards "welfare recipients", as the Tories assert? Certainly not, and the numbers prove it.

A Reputation Takes A Further Blow, Yet Truth Should Prevail

The Chancellor has sustained another hit to her reputation, however, if facts still matter in politics, Badenoch should call off her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its own documents will quench SW1's thirst for blood.

Yet the real story is much more unusual than media reports suggest, and stretches wider and further than the careers of Starmer and the 2024 intake. Fundamentally, herein lies an account concerning what degree of influence the public get in the running of our own country. This should should worry everyone.

Firstly, on to Brass Tacks

When the OBR published recently some of the forecasts it provided to Reeves as she wrote the budget, the surprise was instant. Not merely had the OBR not done such a thing before (an "rare action"), its numbers seemingly went against Reeves's statements. Even as leaks from Westminster suggested the grim nature of the budget would have to be, the watchdog's forecasts were getting better.

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

Several days later, Reeves gave a press conference so unprecedented that it caused breakfast TV to interrupt its regular schedule. Several weeks prior to the real budget, the country was warned: taxes were going up, and the main reason being pessimistic numbers provided by the OBR, specifically its conclusion suggesting the UK was less productive, putting more in but yielding less.

And lo! It came to pass. Despite what Telegraph editorials combined with Tory broadcast rounds implied recently, this is basically what transpired at the budget, which was big and painful and bleak.

The Misleading Justification

Where Reeves misled us concerned her alibi, because those OBR forecasts did not force her hand. She could have chosen different options; she could have given other reasons, including on budget day itself. Prior to the recent election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The potential for national renewal."

A year on, yet it's a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself to be an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She did make decisions, just not the kind the Labour party wishes to publicize. From April 2029 UK workers as well as businesses are set to be contributing another £26bn annually in taxes – but the majority of this will not be spent on improved healthcare, new libraries, or happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of the additional revenue will instead give Reeves cushion against her own fiscal rules. Approximately 25% is allocated to paying for the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the taxes will go on actual new spending, such as abolishing the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always an act of political theatre by George Osborne. A Labour government should have have binned it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform along with all of right-wing media have spent days railing against the idea that Reeves conforms to the stereotype of left-wing finance ministers, soaking strivers to fund the workshy. Labour backbenchers have been applauding her budget for being balm for their social concerns, safeguarding the most vulnerable. Both sides are 180-degrees wrong: Reeves's budget was primarily targeted towards investment funds, speculative capital and the others in the bond markets.

Downing Street could present a compelling argument in its defence. The margins from the OBR were deemed too small to feel secure, especially considering bond investors charge the UK the highest interest rate among G7 rich countries – higher than France, that recently lost a prime minister, and exceeding Japan that carries far greater debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the central bank to reduce its key lending rate.

It's understandable why those folk with Labour badges may choose not to couch it this way when they visit #Labourdoorstep. As one independent adviser to Downing Street puts it, Reeves has "weaponised" financial markets as an instrument of control over Labour MPs and the electorate. This is why the chancellor cannot resign, regardless of which promises she breaks. It is also the reason Labour MPs must knuckle down and support measures to take billions off social security, as Starmer indicated yesterday.

A Lack of Statecraft and an Unfulfilled Pledge

What's missing here is any sense of statecraft, of mobilising the finance ministry and the Bank to reach a new accommodation with markets. Missing too is intuitive knowledge of voters,