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This allegation is a serious one: that Rachel Reeves may have lied to Britons, scaring them to accept massive additional taxes that could be funneled into increased welfare payments. However hyperbolic, this isn't typical political bickering; this time, the consequences are more serious. Just last week, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "a shambles". Now, it is denounced as lies, and Kemi Badenoch demanding the chancellor to quit.

This serious accusation requires straightforward answers, therefore let me provide my view. Has the chancellor lied? Based on current evidence, apparently not. She told no major untruths. But, despite Starmer's recent remarks, it doesn't follow that there is nothing to see and we can all move along. The Chancellor did mislead the public regarding the considerations informing her choices. Was it to channel cash to "welfare recipients", like the Tories claim? Certainly not, as the figures demonstrate this.

A Standing Sustains A Further Hit, But Facts Should Prevail

Reeves has sustained another hit to her reputation, but, if facts still matter in politics, Badenoch should call off her lynch mob. Perhaps the resignation yesterday of OBR head, Richard Hughes, due to the unauthorized release of its own documents will quench Westminster's thirst for blood.

But the true narrative is far stranger compared to the headlines suggest, extending broader and deeper than the careers of Starmer and the 2024 intake. Fundamentally, herein lies a story about what degree of influence the public get in the governance of our own country. This should should worry you.

Firstly, to Brass Tacks

After the OBR released recently a portion of the forecasts it shared with Reeves while she wrote the red book, the shock was instant. Not only has the OBR never acted this way before (described as an "exceptional move"), its numbers seemingly went against the chancellor's words. Even as rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were getting better.

Take the Treasury's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services would be completely funded by taxes: in late October, the OBR calculated this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a media briefing so unprecedented that it caused morning television to break from its regular schedule. Several weeks before the real budget, the nation was warned: taxes would rise, and the primary cause being gloomy numbers provided by the OBR, in particular its conclusion suggesting the UK had become less efficient, putting more in but getting less out.

And so! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied recently, that is essentially what transpired during the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us was her alibi, because those OBR forecasts didn't force her hand. She might have made different options; she might have given alternative explanations, even on budget day itself. Prior to the recent election, Starmer promised exactly such public influence. "The promise of democracy. The strength of the vote. The possibility for national renewal."

A year on, and it's a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure at the mercy of factors outside her influence: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be in this position today, confronting the choices that I face."

She did make a choice, only not one the Labour party cares to publicize. Starting April 2029 UK workers as well as businesses are set to be contributing another £26bn a year in tax – and most of that will not go towards spent on better hospitals, public services, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Really Goes

Rather than going on services, more than 50% of this additional revenue will in fact give Reeves cushion against her self-imposed budgetary constraints. About 25% goes on paying for the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to a Labour chancellor, only 17% of the tax take will go on actual new spending, for example abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it was always an act of theatrical cruelty by George Osborne. A Labour government could and should have binned it in its first 100 days.

The Real Target: The Bond Markets

The Tories, Reform along with all of Blue Pravda have spent days railing against how Reeves conforms to the stereotype of Labour chancellors, soaking hard workers to fund the workshy. Labour backbenchers are cheering her budget as a relief to their troubled consciences, safeguarding the disadvantaged. Both sides are completely mistaken: The Chancellor's budget was largely aimed at investment funds, hedge funds and the others in the bond markets.

Downing Street could present a compelling argument for itself. The margins from the OBR were insufficient for comfort, especially given that bond investors charge the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan that carries far greater debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget enables the Bank of England to cut interest rates.

It's understandable why those wearing red rosettes might not couch it this way when they visit the doorstep. According to a consultant for Downing Street says, Reeves has effectively "utilised" financial markets to act as an instrument of control over her own party and the voters. This is the reason the chancellor can't resign, no matter what pledges she breaks. It is also the reason Labour MPs must knuckle down and vote to take billions off social security, just as Starmer promised recently.

Missing Statecraft , an Unfulfilled Promise

What is absent from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to reach a new accommodation with markets. Missing too is any intuitive knowledge of voters,