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The allegation carries significant weight: that Rachel Reeves may have lied to UK citizens, frightening them to accept massive extra taxes which would be funneled into increased benefits. However exaggerated, this is not usual Westminster sparring; on this occasion, the stakes could be damaging. Just last week, critics aimed at Reeves and Keir Starmer were labeling their budget "chaotic". Today, it's branded as lies, with Kemi Badenoch demanding the chancellor's resignation.

Such a serious accusation requires straightforward responses, therefore let me provide my assessment. Has the chancellor been dishonest? On the available information, no. There were no blatant falsehoods. But, notwithstanding Starmer's recent remarks, that doesn't mean there's no issue here and we should move on. The Chancellor did mislead the public about the considerations informing her choices. Was it to funnel cash towards "benefits street", like the Tories claim? Certainly not, as the numbers demonstrate this.

A Reputation Takes Another Blow, Yet Truth Should Win Out

Reeves has taken another hit to her reputation, however, if facts still matter in politics, Badenoch ought to stand down her lynch mob. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its own documents will satisfy SW1's thirst for blood.

Yet the real story is much more unusual compared to media reports indicate, and stretches wider and further beyond the political futures of Starmer and his class of '24. Fundamentally, this is a story concerning what degree of influence you and I get in the running of the nation. This should should worry everyone.

First, to Brass Tacks

When the OBR published recently a portion of the projections it shared with Reeves as she prepared the budget, the shock was immediate. Not only had the OBR not acted this way before (an "unusual step"), its numbers apparently went against the chancellor's words. While leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were improving.

Consider the Treasury's most "unbreakable" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and other services would be completely paid for by taxes: at the end of October, the watchdog reckoned it would barely be met, albeit by a minuscule margin.

A few days later, Reeves gave a media briefing so extraordinary that it caused breakfast TV to interrupt its usual fare. Several weeks prior to the actual budget, the country was warned: taxes were going up, with the main reason being gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, investing more but getting less out.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds suggested over the weekend, this is essentially what transpired at the budget, which was significant, harsh, and grim.

The Deceptive Alibi

Where Reeves misled us concerned her justification, since these OBR forecasts did not compel her actions. She might have chosen other choices; she could have provided alternative explanations, even on budget day itself. Prior to the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it is a lack of agency that jumps out in Reeves's pre-budget speech. The first Labour chancellor in 15 years portrays herself to be a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She did make decisions, just not one Labour cares to publicize. Starting April 2029 UK workers and businesses are set to be contributing another £26bn a year in taxes – and the majority of this will not be funding improved healthcare, public services, or happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Rather than being spent, more than 50% of this extra cash will in fact provide Reeves cushion for her self-imposed fiscal rules. Approximately 25% is allocated to covering 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 tax take will go on actual new spending, such as abolishing the limit on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been an act of theatrical cruelty by George Osborne. A Labour government should have have binned it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and all of Blue Pravda have spent days barking about the idea that Reeves conforms to the stereotype of Labour chancellors, soaking hard workers to spend on shirkers. Labour backbenchers have been applauding her budget for being a relief to their troubled consciences, safeguarding the disadvantaged. Both sides could be completely mistaken: Reeves's budget was primarily targeted towards investment funds, hedge funds and the others in the financial markets.

Downing Street could present a strong case for itself. The margins provided by the OBR were too small to feel secure, especially given that lenders demand from the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan which has far greater debt. Coupled with the policies to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget allows the central bank to reduce interest rates.

It's understandable why those folk with red rosettes may choose not to couch it this way when they're on the doorstep. As a consultant to Downing Street says, Reeves has "weaponised" the bond market as an instrument of control against her own party and the voters. This is the reason Reeves can't resign, regardless of which promises are broken. It's why Labour MPs will have to knuckle down and support measures that cut billions from social security, as Starmer indicated yesterday.

A Lack of Statecraft and an Unfulfilled Pledge

What is absent here is any sense of strategic governance, of harnessing the Treasury and the central bank to reach a new accommodation with investors. Also absent is any innate understanding of voters,