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This allegation represents a grave matter: that Rachel Reeves may have lied to the British public, scaring them to accept massive extra taxes that could be funneled into higher benefits. However exaggerated, this is not usual Westminster sparring; on this occasion, the stakes could be damaging. Just last week, detractors of Reeves and Keir Starmer had been calling their budget "uncoordinated". Now, it's branded as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

Such a grave accusation demands straightforward answers, so let me provide my assessment. Has the chancellor tell lies? On the available information, apparently not. There were no whoppers. However, despite Starmer's recent remarks, it doesn't follow that there is no issue here and we should move on. The Chancellor did mislead the public regarding the factors informing her decisions. Was it to channel cash towards "welfare recipients", as the Tories assert? No, and the figures demonstrate this.

A Reputation Sustains Another Blow, But Facts Should Prevail

Reeves has sustained a further hit to her reputation, but, should facts still matter in politics, Badenoch ought to call off her lynch mob. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will quench Westminster's thirst for blood.

Yet the true narrative is far stranger than the headlines indicate, extending broader and deeper beyond the political futures of Starmer and his 2024 intake. Fundamentally, herein lies an account about what degree of influence you and I get in the running of the nation. And it concern you.

Firstly, to Brass Tacks

When the OBR published recently a portion of the projections it shared with Reeves as she wrote the red book, the shock was immediate. Not only had the OBR not acted this way before (described as an "exceptional move"), its figures apparently went against Reeves's statements. Even as rumors from Westminster suggested how bleak the budget was going to be, the OBR's own predictions were getting better.

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

Several days later, Reeves gave a press conference so extraordinary that it caused breakfast TV to break from its usual fare. Weeks before the actual budget, the nation was warned: taxes would rise, and the primary cause cited as gloomy numbers from the OBR, in particular its conclusion suggesting the UK had become less productive, investing more but yielding less.

And lo! It happened. Despite what Telegraph editorials and Tory media appearances suggested recently, this is basically what transpired at the budget, which was big and painful and bleak.

The Deceptive Justification

The way in which Reeves misled us concerned her alibi, since these OBR forecasts didn't force her hand. She might have made other choices; she might have provided alternative explanations, even during the statement. Prior to the recent election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor in 15 years portrays herself to be an apolitical figure buffeted by forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any political stripe would be in this position today, confronting the choices that I face."

She did make decisions, only not the kind Labour wishes to broadcast. From April 2029 UK workers as well as businesses are set to be contributing another £26bn annually in tax – and the majority of this will not go towards spent on improved healthcare, public services, nor happier lives. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of going on services, more than 50% of the additional revenue will in fact provide Reeves cushion for her own fiscal rules. Approximately 25% goes on paying for the administration's policy reversals. Examining the OBR's calculations and being as generous as possible towards a Labour chancellor, a mere 17% of the taxes will go on genuinely additional spending, for example abolishing the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. A Labour government should have have binned it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform along with the entire right-wing media have spent days barking about the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to fund the workshy. Labour backbenchers have been cheering her budget as balm for their social concerns, safeguarding the most vulnerable. Each group are 180-degrees wrong: Reeves's budget was largely aimed at asset managers, speculative capital and the others in the bond markets.

The government can make a strong case in its defence. The forecasts provided by the OBR were too small to feel secure, particularly given that lenders charge the UK the highest interest rate among G7 developed nations – exceeding that of France, which lost its leader, higher than Japan which has way more debt. Coupled with our policies to cap 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 why those wearing red rosettes may choose not to couch it this way next time they visit #Labourdoorstep. As a consultant for Downing Street puts it, Reeves has effectively "utilised" financial markets to act as a tool of control against her own party and the voters. It's why Reeves cannot resign, no matter what promises she breaks. It is also why Labour MPs will have to knuckle down and support measures that cut billions from social security, as Starmer promised yesterday.

Missing Statecraft and a Broken Pledge

What's missing here is the notion of strategic governance, of mobilising the finance ministry and the Bank to forge a fresh understanding with investors. Missing too is any intuitive knowledge of voters,