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The accusation carries significant weight: that Rachel Reeves may have lied to Britons, spooking them to accept billions in extra taxes which could be spent on increased welfare payments. While exaggerated, this isn't typical Westminster sparring; on this occasion, the stakes are more serious. Just last week, detractors aimed at Reeves alongside Keir Starmer had been labeling their budget "disorderly". Today, it's branded as falsehoods, and Kemi Badenoch demanding Reeves to step down.

This grave charge requires straightforward responses, so here is my view. Has the chancellor tell lies? Based on current evidence, no. She told no major untruths. However, notwithstanding Starmer's yesterday's comments, it doesn't follow that there's no issue here and we should move on. The Chancellor did misinform the public about the factors shaping her choices. Was this all to funnel cash to "welfare recipients", like the Tories assert? Certainly not, and the numbers prove this.

A Reputation Sustains A Further Hit, Yet Truth Should Prevail

The Chancellor has taken another hit to her reputation, however, if facts still have anything to do with politics, Badenoch ought to call off her attack dogs. Perhaps the resignation yesterday of OBR head, Richard Hughes, over the leak of its own documents will quench SW1's appetite for scandal.

Yet the real story is far stranger than media reports indicate, extending wider and further than the political futures of Starmer and the class of '24. At its heart, herein lies a story about what degree of influence you and I get over the governance of our own country. And it concern you.

Firstly, to Brass Tacks

After the OBR published recently some of the projections it provided to Reeves as she wrote the red book, the surprise was immediate. Not merely had the OBR never acted this way before (described as an "exceptional move"), its figures apparently went against Reeves's statements. Even as rumors from Westminster suggested the grim nature of the budget was going to be, the OBR's own predictions were getting better.

Consider the Treasury's most "iron-clad" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest must be completely paid for by taxes: at the end of October, the OBR calculated this would just about be met, albeit by a tiny margin.

A few days later, Reeves held a media briefing so extraordinary it forced morning television to break from its usual fare. Weeks before the actual budget, the country was warned: taxes would rise, with the main reason being pessimistic numbers from the OBR, specifically its conclusion suggesting the UK was less productive, investing more but yielding less.

And lo! It happened. Notwithstanding what Telegraph editorials combined with Tory broadcast rounds suggested recently, that is essentially what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves misled us was her justification, since these OBR forecasts did not force her hand. She could have chosen different options; she could have given alternative explanations, including on budget day itself. Prior to the recent election, Starmer pledged exactly such people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, and it is a lack of agency that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be a technocrat buffeted by forces outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any party would be standing here today, confronting the decisions that I face."

She did make a choice, just not one the Labour party cares to broadcast. Starting April 2029 UK workers as well as businesses are set to be paying an additional £26bn a year in taxes – but most of that will not go towards spent on better hospitals, new libraries, or happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of going on services, more than 50% of the extra cash will instead give Reeves a buffer against her self-imposed fiscal rules. Approximately 25% is allocated to paying for the administration's policy reversals. Reviewing the OBR's calculations and being as generous as possible towards a Labour chancellor, a mere 17% of the tax take will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, as it had long been an act of political theatre by George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform along with all of right-wing media have spent days barking about the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to spend on the workshy. Party MPs are applauding her budget for being balm for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was largely targeted towards asset managers, hedge funds and the others in the bond markets.

The government can make a strong case in its defence. The margins from the OBR were deemed too small for comfort, especially given that bond investors demand from the UK the greatest borrowing cost of all G7 developed nations – higher than France, that recently lost a prime minister, higher than Japan which has far greater debt. Coupled with our measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan enables the central bank to reduce interest rates.

You can see why those folk with red rosettes might not frame it this way next time they're on #Labourdoorstep. According to one independent adviser for Downing Street puts it, Reeves has "weaponised" financial markets as an instrument of discipline over her own party and the voters. This is why Reeves can't resign, no matter what pledges are broken. It is also the reason Labour MPs will have to knuckle down and support measures to take billions off social security, just as Starmer indicated recently.

A Lack of Statecraft and a Broken Promise

What's missing from this is the notion of statecraft, of harnessing the finance ministry and the central bank to forge a fresh understanding with investors. Also absent is any intuitive knowledge of voters,