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This charge represents a grave matter: suggesting Rachel Reeves has misled the British public, spooking them to accept billions in extra taxes that would be funneled into higher benefits. While exaggerated, this isn't usual political bickering; this time, the consequences could be damaging. Just last week, critics aimed at Reeves and Keir Starmer were calling their budget "chaotic". Now, it is branded as lies, with Kemi Badenoch calling for Reeves to step down.

This grave accusation demands straightforward responses, so here is my view. Has the chancellor been dishonest? Based on current information, no. She told no whoppers. However, despite Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we should move on. The Chancellor did misinform the public about the considerations shaping her decisions. Was this all to funnel cash to "welfare recipients", like the Tories assert? Certainly not, as the numbers demonstrate it.

A Reputation Sustains A Further Hit, Yet Truth Must Prevail

The Chancellor has taken another blow to her standing, however, should facts continue to have anything to do with politics, Badenoch should stand down her attack dogs. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

But the real story is much more unusual than the headlines suggest, and stretches broader and deeper beyond the careers of Starmer and his 2024 intake. Fundamentally, herein lies a story concerning what degree of influence you and I get over the running of the nation. And it concern everyone.

Firstly, to Brass Tacks

After the OBR published recently some of the projections it provided to Reeves as she wrote the budget, the surprise was instant. Not merely had the OBR never done such a thing before (an "unusual step"), its figures seemingly contradicted the chancellor's words. Even as rumors from Westminster were about the grim nature of the budget was going to be, the OBR's own forecasts were improving.

Consider the government's most "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and other services must be wholly funded by taxes: in late October, the watchdog reckoned it would barely be met, albeit only by a tiny margin.

Several days later, Reeves gave a media briefing so unprecedented it forced morning television to interrupt its usual fare. Several weeks prior to the actual budget, the country was warned: taxes were going up, with the main reason cited as pessimistic numbers from the OBR, in particular its conclusion that the UK was less productive, investing more but getting less out.

And so! It came to pass. Notwithstanding what Telegraph editorials combined with Tory media appearances implied over the weekend, this is essentially what happened at the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us concerned her justification, because those OBR forecasts did not compel her actions. She could have made different options; she could have provided alternative explanations, including on budget day itself. Before last year's election, Starmer pledged exactly such public influence. "The promise of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it's powerlessness that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be a technocrat at the mercy of forces outside her influence: "In the context of the long-term challenges with our productivity … any finance minister of any party would be standing here today, confronting the decisions that I face."

She did make a choice, only not one Labour wishes to broadcast. From April 2029 UK workers and businesses are set to be contributing an additional £26bn annually in tax – but most of that will not be spent on improved healthcare, public services, nor enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Cash Really Goes

Instead of being spent, over 50% of this extra cash will instead give Reeves a buffer for her self-imposed fiscal rules. About 25% goes on covering the administration's policy reversals. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, a mere 17% of the taxes will fund actual new spending, for example abolishing the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. This administration should have have binned it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform along with the entire right-wing media have been barking about how Reeves conforms to the stereotype of left-wing finance ministers, taxing hard workers to spend on shirkers. Labour backbenchers are cheering her budget for being a relief to their troubled consciences, safeguarding the disadvantaged. Each group could be 180-degrees wrong: Reeves's budget was largely targeted towards investment funds, hedge funds and participants within the bond markets.

The government can make a compelling argument in its defence. The forecasts provided by the OBR were insufficient for comfort, particularly given that bond investors charge the UK the greatest borrowing cost of all G7 developed nations – higher than France, that recently lost its leader, higher than Japan which has way more debt. Combined with the measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the Bank of England to reduce interest rates.

You can see that those wearing Labour badges might not couch it this way when they're on the doorstep. As one independent adviser to Downing Street puts it, Reeves has "utilised" financial markets to act as an instrument of control against Labour MPs and the electorate. This is the reason the chancellor can't resign, no matter what pledges she breaks. It is also why Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer indicated yesterday.

Missing Statecraft , a Broken Pledge

What is absent from this is the notion of strategic governance, of mobilising the finance ministry and the Bank to reach a new accommodation with investors. Also absent is any intuitive knowledge of voters,