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This allegation carries significant weight: suggesting Rachel Reeves may have deceived UK citizens, scaring them into accepting billions in additional taxes which would be used for increased benefits. However exaggerated, this isn't typical political sparring; this time, the consequences are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "disorderly". Today, it's branded as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

This serious accusation requires clear responses, so let me provide my view. Did the chancellor been dishonest? On the available information, apparently not. She told no major untruths. However, notwithstanding Starmer's yesterday's remarks, that doesn't mean there's no issue here and we can all move along. The Chancellor did mislead the public regarding the factors informing her choices. Was it to channel cash to "welfare recipients", like the Tories claim? Certainly not, as the numbers prove it.

A Reputation Sustains A Further Hit, Yet Truth Must Prevail

Reeves has sustained a further hit to her reputation, however, if facts still matter in politics, Badenoch should call off her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, due to the leak of its own documents will satisfy SW1's appetite for scandal.

Yet the real story is far stranger than media reports indicate, extending wider and further beyond the careers of Starmer and the class of '24. At its heart, this is a story about how much say the public have in the running of our own country. This should concern you.

Firstly, to Brass Tacks

When the OBR published recently some of the forecasts it shared with Reeves while she wrote the red book, the surprise was immediate. Not merely has the OBR not done such a thing before (an "rare action"), its numbers seemingly went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Take the government's so-called "iron-clad" rule, stating by 2030 daily spending for hospitals, schools, and the rest must be completely paid for by taxes: at the end of October, the OBR reckoned this would just about be met, albeit by a minuscule margin.

Several days later, Reeves gave a press conference so extraordinary that it caused breakfast TV to break from its usual fare. Several weeks before the real budget, the country was warned: taxes were going up, with the main reason cited as pessimistic numbers provided by the OBR, in particular its finding suggesting the UK was less productive, putting more in but getting less out.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances implied recently, that is essentially what happened at the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us was her justification, because those OBR forecasts didn't compel her actions. She might have chosen different options; she could have given alternative explanations, including during the statement. Before the recent election, Starmer promised precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility 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 buffeted by forces beyond her control: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any party would be in this position today, confronting the choices that I face."

She certainly make a choice, only not one the Labour party cares to publicize. From April 2029 UK workers as well as businesses will be contributing an additional £26bn a year in taxes – but most of that will not go towards spent on improved healthcare, public services, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Instead of being spent, over 50% of this extra cash will instead provide Reeves a buffer for her self-imposed fiscal rules. About 25% is allocated to covering the administration's policy reversals. Examining the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the taxes will fund genuinely additional spending, such as abolishing the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been an act of political theatre by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform and the entire right-wing media have spent days barking about how Reeves conforms to the stereotype of Labour chancellors, soaking strivers to fund the workshy. Party MPs have been cheering her budget as balm for their troubled consciences, protecting the disadvantaged. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily aimed at investment funds, hedge funds and the others in the financial markets.

The government could present a compelling argument in its defence. The margins from the OBR were insufficient to feel secure, especially considering bond investors charge the UK the highest interest rate among G7 rich countries – higher than France, which lost a prime minister, higher than Japan which has far greater debt. Combined with our policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget enables the Bank of England to cut interest rates.

It's understandable that those folk with red rosettes may choose not to couch it in such terms next time they're on the doorstep. According to a consultant to Downing Street says, Reeves has effectively "weaponised" the bond market as an instrument of control over her own party and the voters. It's why Reeves cannot resign, no matter what promises are broken. It's why Labour MPs must fall into line and vote that cut billions from social security, as Starmer indicated recently.

Missing Statecraft , a Broken Pledge

What's missing from this is any sense of strategic governance, of mobilising the Treasury and the Bank to reach a new accommodation with investors. Missing too is any innate understanding of voters,