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This accusation is a serious one: suggesting Rachel Reeves may have deceived Britons, frightening them into accepting massive additional taxes which would be funneled into higher benefits. However hyperbolic, this isn't usual political sparring; this time, the consequences are higher. A week ago, detractors of Reeves and Keir Starmer were labeling their budget "a shambles". Today, it is denounced as falsehoods, with Kemi Badenoch calling for the chancellor's resignation.

This serious accusation demands straightforward answers, therefore here is my view. Has the chancellor tell lies? Based on current evidence, no. There were no whoppers. But, despite Starmer's recent remarks, that doesn't mean there's no issue here and we should move on. The Chancellor did misinform the public regarding the factors shaping her choices. Was it to funnel cash to "welfare recipients", as the Tories assert? Certainly not, as the figures prove it.

A Reputation Takes Another Blow, But Facts Must Prevail

The Chancellor has taken a further hit to her standing, but, if facts continue to matter in politics, Badenoch should call off her lynch mob. Perhaps the resignation yesterday of OBR head, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's thirst for blood.

Yet the real story is much more unusual than media reports suggest, extending broader and deeper beyond the careers of Starmer and the class of '24. Fundamentally, this is a story about what degree of influence you and I have over the governance of the nation. This should should worry you.

Firstly, to the Core Details

When the OBR released recently some of the forecasts it shared with Reeves while she wrote the budget, the surprise was instant. Not merely had the OBR not acted this way before (an "exceptional move"), its figures apparently contradicted the chancellor's words. Even as rumors from Westminster suggested how bleak the budget would have to be, the watchdog's predictions were getting better.

Consider the government's so-called "iron-clad" fiscal rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the OBR reckoned this would barely be met, albeit only by a minuscule margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused morning television to break from its regular schedule. Weeks before the actual budget, the country was warned: taxes would rise, with the main reason being pessimistic numbers provided by the OBR, in particular its finding suggesting the UK had become less productive, putting more in but yielding less.

And lo! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds suggested over the weekend, this is essentially what happened at the budget, that proved to be big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us was her alibi, because those OBR forecasts didn't compel her actions. She might have made different options; she could have provided other reasons, including on budget day itself. Prior to the recent election, Starmer promised exactly such people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, and it's 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 a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any party would be standing here today, confronting the decisions that I face."

She did make a choice, just not one Labour wishes to publicize. From April 2029 UK workers as well as businesses will be paying an additional £26bn annually in tax – but the majority of this will not go towards spent on better hospitals, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Instead of being spent, over 50% of the additional revenue will instead give Reeves a buffer for her own fiscal rules. Approximately 25% goes on paying for the government's own policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the taxes will go on genuinely additional spending, such as scrapping the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it had long been a bit of political theatre by George Osborne. A Labour government could and should have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform along with the entire right-wing media have been barking about the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing strivers to spend on shirkers. Labour backbenchers have been applauding her budget as balm for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was largely aimed at asset managers, hedge funds and the others in the bond markets.

The government can make a compelling argument in its defence. The margins from the OBR were deemed insufficient for comfort, particularly given that lenders charge the UK the greatest borrowing cost among G7 developed nations – exceeding that of France, which lost a prime minister, and exceeding Japan which has way more debt. Combined with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the central bank to reduce its key lending rate.

It's understandable why those folk with Labour badges might not couch it this way when they're on #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has effectively "utilised" the bond market as a tool of discipline against her own party and the voters. It's why the chancellor can't resign, no matter what pledges are broken. It is also the reason Labour MPs will have to fall into line and support measures to take billions off social security, just as Starmer indicated recently.

Missing Statecraft , a Broken Promise

What is absent here is the notion of strategic governance, of mobilising the finance ministry and the central bank to reach a new accommodation with markets. Missing too is any innate understanding of voters,