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This charge is a serious one: suggesting Rachel Reeves has lied to the British public, frightening them to accept billions in extra taxes that could be spent on higher welfare payments. However hyperbolic, this isn't usual political sparring; this time, the stakes could be damaging. A week ago, detractors aimed at Reeves alongside Keir Starmer were labeling their budget "uncoordinated". Today, it is denounced as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

This serious charge demands straightforward answers, so let me provide my assessment. Has the chancellor been dishonest? Based on the available information, no. There were no blatant falsehoods. But, notwithstanding Starmer's yesterday's remarks, it doesn't follow that 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 assert? No, as the figures prove it.

A Standing Takes A Further Hit, But Facts Must Prevail

Reeves has sustained a further hit to her reputation, but, if facts still matter in politics, Badenoch should call off her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, due to the unauthorized release of its internal documents will quench SW1's appetite for scandal.

Yet the real story is much more unusual than media reports suggest, extending wider and further beyond the political futures of Starmer and his class of '24. At its heart, this is a story concerning what degree of influence you and I get over the running of our own country. This should concern everyone.

First, to Brass Tacks

When the OBR released recently some of the forecasts it shared with Reeves as she prepared the budget, the surprise was immediate. Not merely had the OBR never acted this way before (an "exceptional move"), its figures seemingly contradicted Reeves's statements. Even as rumors from Westminster were about the grim nature of the budget was going to be, the watchdog's forecasts were getting better.

Take the government's most "unbreakable" rule, that by 2030 daily spending for hospitals, schools, and the rest would be completely funded by taxes: in late October, the watchdog reckoned this would barely be met, albeit only by a tiny margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to break from its regular schedule. Weeks prior to the real budget, the country was put on alert: taxes would rise, and the main reason being gloomy numbers provided by the OBR, specifically 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, that is basically what happened during the budget, that proved to be big and painful and bleak.

The Misleading Justification

Where Reeves misled us was her alibi, since those OBR forecasts didn't compel her actions. She might have chosen other choices; she might have given alternative explanations, including on budget day itself. Before the recent election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it's powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by forces beyond her control: "In the context of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, facing the choices that I face."

She did make a choice, just not one the Labour party cares to publicize. Starting April 2029 UK workers and businesses are set to be paying an additional £26bn a year in tax – but most of that will not be funding improved healthcare, public services, or happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Instead of going on services, over 50% of the additional revenue will in fact give Reeves a buffer against her self-imposed fiscal rules. Approximately 25% is allocated to covering the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible towards Reeves, only 17% of the tax take will go on genuinely additional spending, for example abolishing the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it had long been an act of political theatre by George Osborne. This administration should have have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform and all of Blue Pravda have spent days railing against how Reeves fits the caricature of Labour chancellors, taxing strivers to fund shirkers. Party MPs are cheering her budget as a relief for their troubled consciences, safeguarding the disadvantaged. Each group are completely mistaken: The Chancellor's budget was largely targeted towards 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 for comfort, particularly considering bond investors demand from the UK the greatest borrowing cost of all G7 rich countries – higher than France, which lost a prime minister, and exceeding Japan which has way more debt. Combined with our policies to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the central bank to reduce interest rates.

You can see that those folk with red rosettes might not frame it this way next time they visit #Labourdoorstep. As a consultant to Downing Street says, Reeves has effectively "weaponised" the bond market to act as a tool of discipline against Labour MPs and the voters. It's why Reeves can't resign, regardless of which promises are broken. It's why Labour MPs will have to knuckle down and vote that cut billions from social security, just as Starmer promised recently.

Missing Statecraft , a Broken Pledge

What's missing here is the notion of strategic governance, of harnessing the Treasury and the Bank to forge a new accommodation with markets. Also absent is any intuitive knowledge of voters,