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The accusation carries significant weight: suggesting Rachel Reeves may have misled UK citizens, spooking them into accepting billions in additional taxes that would be funneled into higher welfare payments. However hyperbolic, this isn't typical political sparring; this time, the stakes are higher. A week ago, detractors aimed at Reeves and Keir Starmer were labeling their budget "a mess". Today, it is denounced as lies, and Kemi Badenoch demanding the chancellor to quit.

This serious accusation requires straightforward responses, therefore let me provide my assessment. Has the chancellor tell lies? Based on the available information, no. She told no major untruths. However, notwithstanding Starmer's recent remarks, that doesn't mean there is nothing to see and we should move on. Reeves did mislead the public about the considerations shaping her decisions. Was this all to funnel cash towards "welfare recipients", as the Tories claim? No, as the figures demonstrate it.

A Standing Takes A Further Hit, Yet Truth Should Win Out

Reeves has sustained a further hit to her reputation, however, should facts still have anything to do with politics, Badenoch should stand down her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will satisfy Westminster's appetite for scandal.

Yet the real story is far stranger than media reports suggest, and stretches broader and deeper than the careers of Starmer and the 2024 intake. At its heart, this is a story about how much say the public get over the running of our own country. And it should worry everyone.

First, to Brass Tacks

After the OBR released recently some of the forecasts it shared with Reeves while she prepared the budget, the surprise was immediate. Not only had the OBR never done such a thing before (described as an "unusual step"), its figures apparently went against the chancellor's words. Even as rumors from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were getting better.

Consider the government's most "unbreakable" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services would be wholly paid for by taxes: in late October, the watchdog reckoned this would just about be met, albeit by a minuscule margin.

Several days later, Reeves gave a media briefing so extraordinary it forced morning television to interrupt its regular schedule. Weeks prior to the actual budget, the country was put on alert: taxes would rise, with the main reason being pessimistic numbers provided by the OBR, in particular its finding suggesting the UK was less productive, putting more in but getting less out.

And so! It came to pass. Despite the implications from Telegraph editorials and Tory broadcast rounds suggested recently, this is essentially what happened at the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us concerned her alibi, since those OBR forecasts did not force her hand. She could have chosen different options; she could have given other reasons, even during the statement. Prior to the recent election, Starmer pledged precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it is a lack of agency that jumps out from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by factors outside her influence: "In the context of the persistent challenges on our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She did make a choice, just not one the Labour party cares to publicize. Starting April 2029 British workers as well as businesses are set to be contributing another £26bn annually in taxes – and the majority of this will not go towards funding better hospitals, public services, nor enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Rather than going on services, over 50% of this additional revenue will in fact provide Reeves a buffer against her own fiscal rules. Approximately 25% is allocated to covering the administration's U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, only 17% of the tax take will go on actual new spending, for example abolishing the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, as it was always a bit of political theatre from George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform along with all of right-wing media have spent days barking about the idea that Reeves conforms to the caricature of left-wing finance ministers, soaking strivers to spend on shirkers. Party MPs are cheering her budget for being balm to their troubled consciences, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was largely targeted towards investment funds, hedge funds and participants within the bond markets.

Downing Street can make a strong case in its defence. The forecasts provided by the OBR were too small to feel secure, particularly given that bond investors charge the UK the greatest borrowing cost among G7 developed nations – higher than France, that recently lost its leader, and exceeding Japan which has way more debt. Combined with our measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the central bank to cut interest rates.

It's understandable that those folk with red rosettes may choose not to couch it this way next time they're on the doorstep. According to a consultant to Downing Street puts it, Reeves has "weaponised" the bond market as an instrument of discipline over Labour MPs and the voters. This is the reason Reeves can't resign, no matter what pledges are broken. It is also why Labour MPs will have to knuckle down and vote that cut billions from social security, as Starmer indicated recently.

Missing Statecraft , a Broken Pledge

What is absent from this is any sense of statecraft, of harnessing the finance ministry and the Bank to forge a new accommodation with investors. Also absent is innate understanding of voters,