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This accusation is a serious one: that Rachel Reeves may have lied to the British public, scaring them into accepting billions in extra taxes that could be used for higher benefits. While exaggerated, this is not typical Westminster sparring; on this occasion, the consequences could be damaging. Just last week, critics of Reeves alongside Keir Starmer had been calling their budget "uncoordinated". Today, it's denounced as falsehoods, with Kemi Badenoch demanding the chancellor to quit.

This grave accusation requires clear answers, therefore here is my view. Did the chancellor lied? Based on current information, no. She told no blatant falsehoods. But, notwithstanding Starmer's recent remarks, it doesn't follow that there's nothing to see and we should move on. The Chancellor did mislead the public about the considerations shaping her choices. Was this all to channel cash towards "welfare recipients", like the Tories assert? No, as the figures prove this.

A Standing Sustains Another Blow, Yet Truth Should Win Out

The Chancellor has sustained another blow to her standing, but, should facts still have anything to do with politics, Badenoch should call off her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will satisfy SW1's thirst for blood.

Yet the true narrative is far stranger compared to the headlines indicate, extending wider and further beyond the political futures of Starmer and the class of '24. At its heart, this is an account about what degree of influence you and I have over the governance of the nation. This should should worry you.

First, on to Brass Tacks

When the OBR released recently a portion of the projections it provided to Reeves as she wrote the red book, the shock was instant. Not merely has the OBR never acted this way before (described as an "rare action"), its numbers seemingly contradicted Reeves's statements. While rumors from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were getting better.

Consider the Treasury's so-called "unbreakable" fiscal rule, stating by 2030 daily spending on hospitals, schools, and other services must be wholly funded by taxes: in late October, the watchdog calculated it would just about be met, albeit only by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused morning television to break from its regular schedule. Several weeks before the real budget, the nation was put on alert: taxes would rise, with the main reason being pessimistic numbers from the OBR, specifically its finding suggesting the UK was less productive, putting more in but yielding less.

And so! It happened. Despite the implications from Telegraph editorials and Tory broadcast rounds suggested recently, that is basically what transpired at the budget, which was big and painful and bleak.

The Misleading Alibi

Where Reeves misled us was her alibi, since these OBR forecasts didn't force her hand. She could have made other choices; she could have provided other reasons, including on budget day itself. Prior to last year's election, Starmer pledged precisely this kind of people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, and it is powerlessness that jumps out in Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself to be an apolitical figure at the mercy of forces beyond her control: "In the context of the persistent challenges with our productivity … any finance minister of any political stripe would be standing here today, confronting the decisions that I face."

She did make decisions, only not one the Labour party cares to publicize. From April 2029 UK workers as well as businesses will be paying another £26bn annually in taxes – and most of that will not go towards spent on better hospitals, new libraries, or enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Rather than being spent, over 50% of this extra cash will instead provide Reeves a buffer against her own fiscal rules. About 25% is allocated to covering the administration's U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt to Reeves, only 17% of the taxes will fund genuinely additional spending, for example abolishing the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, because it was always a bit of political theatre from George Osborne. A Labour government should have abolished it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform and the entire Blue Pravda have been railing against how Reeves fits the stereotype of left-wing finance ministers, taxing strivers to fund the workshy. Labour backbenchers are applauding her budget as a relief to their social concerns, safeguarding the most vulnerable. Both sides could be 180-degrees wrong: Reeves's budget was largely aimed at investment funds, speculative capital and participants within the financial markets.

Downing Street could present a compelling argument in its defence. The forecasts from the OBR were deemed too small to feel secure, especially given that bond investors charge the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost a prime minister, higher than Japan which has way more debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget enables the Bank of England to cut its key lending rate.

It's understandable that those folk with red rosettes might not frame it in such terms when they're on the doorstep. As one independent adviser for Downing Street puts it, Reeves has "utilised" the bond market as an instrument of control against her own party and the voters. It's the reason Reeves can't resign, no matter what pledges are broken. It's the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer indicated recently.

Missing Statecraft , a Broken Pledge

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