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This charge is a serious one: suggesting Rachel Reeves may have misled the British public, frightening them to accept billions in extra taxes that could be spent on increased benefits. While hyperbolic, this is not usual political bickering; this time, the stakes are higher. Just last week, critics aimed at Reeves and Keir Starmer were labeling their budget "a shambles". Now, it is denounced as falsehoods, with Kemi Badenoch calling for the chancellor's resignation.

Such a grave accusation demands clear answers, so let me provide my view. Did the chancellor tell lies? On the available information, no. There were no whoppers. However, despite Starmer's recent remarks, that doesn't mean there is no issue here and we should move on. Reeves did misinform the public about the factors informing her decisions. Was this all to channel cash towards "welfare recipients", like the Tories claim? Certainly not, and the numbers demonstrate this.

A Reputation Sustains Another Blow, But Facts Must Win Out

The Chancellor has taken another hit to her standing, however, if facts continue to have anything to do with politics, Badenoch ought to stand down her attack dogs. Maybe the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

But the real story is much more unusual compared to the headlines suggest, and stretches wider and further beyond the careers of Starmer and the 2024 intake. At its heart, herein lies a story about how much say the public have in the governance of our own country. And it should worry you.

First, to Brass Tacks

After the OBR released recently some of the forecasts it shared with Reeves as she wrote the red book, the surprise was instant. Not only had the OBR not acted this way before (an "rare action"), its numbers seemingly contradicted Reeves's statements. Even as leaks from Westminster were about the grim nature of the budget was going to be, the watchdog's forecasts were improving.

Consider the government's so-called "unbreakable" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest must be wholly funded 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 gave a media briefing so unprecedented that it caused morning television to break from its regular schedule. Weeks before the real budget, the nation was put on alert: taxes would rise, with the main reason being gloomy numbers from the OBR, in particular its conclusion suggesting the UK was less productive, putting more in but getting less out.

And lo! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is essentially what transpired during the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves misled us concerned her justification, since these OBR forecasts didn't compel her actions. She might have chosen different options; she could have provided other reasons, even during the statement. Prior to last year's election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it's a lack of agency that jumps out from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself as an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any party would be in this position today, confronting the decisions that I face."

She certainly make a choice, only not one the Labour party wishes to broadcast. From April 2029 UK workers and businesses are set to be contributing another £26bn annually in taxes – and the majority of this will not be funding better hospitals, new libraries, nor enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Money Actually Ends Up

Instead of being spent, over 50% of the additional revenue will in fact give Reeves cushion against her own budgetary constraints. Approximately 25% is allocated to covering the administration's U-turns. Examining the OBR's calculations and being as generous as possible towards a Labour chancellor, only 17% of the tax take will go on actual new spending, for example abolishing the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it was always a bit of theatrical cruelty from George Osborne. A Labour government could and should abolished it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform along with the entire right-wing media have been railing against the idea that Reeves conforms to the caricature of Labour chancellors, soaking hard workers to spend on the workshy. Party MPs have been applauding her budget as a relief to their social concerns, protecting the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was primarily aimed at investment funds, speculative capital and the others in the financial markets.

The government could present a strong case for itself. The forecasts from the OBR were insufficient for comfort, especially given that lenders charge the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries far greater debt. Coupled with our measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan allows the central bank to reduce interest rates.

You can see that those wearing Labour badges might not couch it this way when they visit the doorstep. As one independent adviser for Downing Street puts it, Reeves has "weaponised" financial markets as an instrument of discipline against Labour MPs and the voters. This is the reason Reeves cannot resign, no matter what promises are broken. It's the reason Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer promised yesterday.

Missing Statecraft and an Unfulfilled Promise

What is absent from this is the notion of statecraft, of mobilising the Treasury and the Bank to reach a new accommodation with investors. Missing too is any intuitive knowledge of voters,