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The charge is a serious one: suggesting Rachel Reeves may have misled the British public, frightening them to accept billions in additional taxes which could be funneled into higher benefits. While hyperbolic, this is not usual political sparring; on this occasion, the stakes are higher. A week ago, detractors of Reeves and Keir Starmer had been labeling their budget "a mess". Today, it's denounced as lies, with Kemi Badenoch calling for the chancellor to quit.

Such a grave charge requires straightforward responses, therefore let me provide my assessment. Has the chancellor lied? Based on the available information, apparently not. She told no blatant falsehoods. But, despite Starmer's recent remarks, it doesn't follow that there's no issue here and we can all move along. The Chancellor did mislead the public regarding the considerations informing her choices. Was it to funnel cash towards "benefits street", like the Tories assert? No, and the figures prove this.

A Reputation Takes A Further Blow, Yet Truth Should Prevail

The Chancellor has taken another blow to her reputation, however, if facts still matter in politics, Badenoch ought to stand down her attack dogs. Maybe the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

But the real story is much more unusual compared to the headlines suggest, extending wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is an account concerning how much say the public have in the running of the nation. And it should worry everyone.

Firstly, to Brass Tacks

After the OBR released recently some of the forecasts it provided to Reeves as she wrote the budget, the surprise was immediate. Not merely has the OBR not done such a thing before (an "unusual step"), its numbers apparently went against Reeves's statements. Even as rumors from Westminster were about how bleak the budget was going to be, the OBR's own forecasts were improving.

Consider the government's most "iron-clad" rule, that by 2030 daily spending for hospitals, schools, and other services would be completely funded by taxes: at the end of October, the watchdog reckoned this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so unprecedented that it caused morning television to break from its regular schedule. Weeks prior to the real budget, the country was put on alert: taxes would rise, with the primary cause being pessimistic numbers from 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 combined with Tory media appearances implied over the weekend, this is basically what happened during the budget, which was significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us concerned her alibi, because those OBR forecasts did not compel her actions. She might have chosen different options; she might have provided other reasons, even during the statement. Prior to last year's election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength 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 in 15 years portrays herself to be a technocrat at the mercy of factors outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She did make a choice, just not the kind the Labour party wishes to publicize. Starting April 2029 UK workers as well as businesses will be paying an additional £26bn annually in tax – but most of that will not be funding better hospitals, new libraries, or enhanced wellbeing. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Cash Really Goes

Rather than being spent, over 50% of this additional revenue will in fact give Reeves cushion for her self-imposed fiscal rules. Approximately 25% goes on paying for the government's own U-turns. Reviewing the watchdog's figures 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 two-child cap on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it was always an act of political theatre from George Osborne. This administration could and should abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have spent days barking about the idea that Reeves conforms to the caricature of Labour chancellors, taxing strivers to spend on shirkers. Labour backbenchers have been applauding her budget for being a relief for their troubled consciences, protecting the most vulnerable. Both sides could be 180-degrees wrong: Reeves's budget was largely aimed at asset managers, hedge funds and the others in the financial markets.

Downing Street can make a strong case for itself. The forecasts from the OBR were too small for comfort, particularly given that lenders charge the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost its leader, higher than Japan that carries far greater debt. Combined with the policies to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget allows the central bank to cut interest rates.

It's understandable why those wearing Labour badges may choose not to frame it in such terms next time they visit the doorstep. According to a consultant to Downing Street says, Reeves has "utilised" the bond market as an instrument of control against her own party and the electorate. This is why the chancellor can't resign, no matter what promises are broken. It's why Labour MPs must knuckle down and vote that cut billions from social security, as Starmer indicated yesterday.

Missing Statecraft and a Broken Pledge

What's missing here is any sense of statecraft, of mobilising the finance ministry and the central bank to reach a new accommodation with investors. Also absent is any innate understanding of voters,