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This charge carries significant weight: suggesting Rachel Reeves may have deceived Britons, scaring them to accept billions in additional taxes that would be funneled into increased welfare payments. While exaggerated, this is not usual Westminster bickering; on this occasion, the stakes could be damaging. Just last week, detractors of Reeves and Keir Starmer had been calling their budget "uncoordinated". Today, it is branded as falsehoods, and Kemi Badenoch calling for the chancellor's resignation.

This grave accusation requires clear responses, therefore let me provide my assessment. Has the chancellor lied? On the available information, no. She told no blatant falsehoods. However, despite Starmer's recent comments, it doesn't follow that there's nothing to see and we can all move along. The Chancellor did mislead the public regarding the factors informing her choices. Was it to channel cash to "benefits street", as the Tories assert? No, and the figures demonstrate this.

A Reputation Takes A Further Blow, Yet Truth Should Prevail

Reeves has sustained another hit to her reputation, however, should facts continue to matter in politics, Badenoch ought to stand down her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its own documents will satisfy Westminster's thirst for blood.

But the true narrative is much more unusual than the headlines suggest, and stretches wider and further beyond the careers 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 our own country. This should concern you.

First, to Brass Tacks

After the OBR published last Friday some of the forecasts it shared with Reeves while she wrote the budget, the shock was immediate. Not only had the OBR never acted this way before (an "rare action"), its numbers seemingly went against Reeves's statements. While leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were improving.

Take the government's most "iron-clad" rule, stating by 2030 day-to-day spending on hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR reckoned this would barely be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so extraordinary it forced breakfast TV to interrupt its regular schedule. Weeks prior to the actual budget, the nation was warned: taxes would rise, and the primary cause cited as pessimistic numbers provided by the OBR, in particular its finding that 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 implied over the weekend, this is basically what transpired at the budget, which was significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us concerned her alibi, since these OBR forecasts didn't force her hand. She might have chosen different options; she might have provided other reasons, even on budget day itself. Prior to the recent election, Starmer pledged exactly such public influence. "The promise of democracy. The power of the vote. The potential for national renewal."

A year on, and it's a lack of agency that jumps out in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself to be a technocrat at the mercy of forces outside her influence: "In the context of the long-term challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, only not one Labour wishes to broadcast. Starting April 2029 UK workers and businesses are set to be contributing an additional £26bn a year in tax – but the majority of this will not go towards funding better hospitals, public services, or happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of the extra cash will in fact give Reeves cushion against her self-imposed fiscal rules. About 25% goes on paying for the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible towards Reeves, a mere 17% of the tax take will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, because it had long been an act of political theatre by George Osborne. This administration could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform and the entire right-wing media have been railing against how Reeves conforms to the stereotype of Labour chancellors, soaking hard workers to fund the workshy. Party MPs are applauding her budget as balm to their troubled consciences, safeguarding the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and the others in the financial markets.

Downing Street could present a compelling argument for itself. The forecasts from the OBR were deemed insufficient to feel secure, especially considering lenders demand from the UK the greatest borrowing cost of all G7 developed nations – higher than France, which lost its leader, and exceeding Japan which has way more debt. Coupled with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan enables the Bank of England to cut its key lending rate.

It's understandable that those folk with red rosettes might not couch it in such terms next time they're on the doorstep. As one independent adviser for Downing Street says, 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, regardless of which pledges she breaks. It is also why Labour MPs must knuckle down and support measures to take billions off social security, as Starmer indicated recently.

A Lack of Statecraft and an Unfulfilled Pledge

What's missing from this is the notion of statecraft, of mobilising the finance ministry and the central bank to reach a new accommodation with investors. Missing too is intuitive knowledge of voters,