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This allegation carries significant weight: suggesting Rachel Reeves has lied to the British public, spooking them to accept billions in additional taxes that could be funneled into higher welfare payments. However hyperbolic, this is not usual political sparring; this time, the stakes could be damaging. A week ago, detractors of Reeves alongside Keir Starmer were calling their budget "uncoordinated". Now, it is branded as lies, with Kemi Badenoch demanding the chancellor to quit.

Such a serious accusation requires clear responses, so here is my assessment. Did the chancellor been dishonest? On current information, no. There were no blatant falsehoods. But, notwithstanding 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 about the considerations informing her decisions. Was this all to funnel cash to "benefits street", like the Tories assert? Certainly not, and the numbers prove this.

A Reputation Takes A Further Blow, But Facts Must Prevail

The Chancellor has sustained another blow to her standing, but, if facts continue to have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the real story is far stranger than media reports indicate, extending wider and further than the careers of Starmer and the 2024 intake. Fundamentally, herein lies an account about what degree of influence you and I have over the running of our own country. And it should worry you.

First, to Brass Tacks

When the OBR released recently a portion of the forecasts it shared with Reeves as she wrote the red book, the surprise was immediate. Not merely has the OBR never acted this way before (an "exceptional move"), its numbers seemingly went against Reeves's statements. While leaks from Westminster were about how bleak the budget would have to be, the OBR's own predictions were improving.

Consider the government's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services would be completely paid for by taxes: at the end of October, the OBR calculated this would just about be met, albeit by a minuscule margin.

A few days later, Reeves gave a press conference so extraordinary it forced breakfast TV to interrupt its regular schedule. Several weeks prior to the actual budget, the country was warned: taxes were going up, with the primary cause being gloomy numbers from the OBR, specifically its conclusion that the UK had become less productive, putting more in but yielding less.

And lo! It came to pass. Despite the implications from Telegraph editorials combined with Tory media appearances suggested over the weekend, this is basically what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

The way in which Reeves misled us was her justification, because those OBR forecasts didn't force her hand. She could have made other choices; she could have provided alternative explanations, even during the statement. Before the recent election, Starmer promised precisely this kind of public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it's powerlessness that jumps out in Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any political stripe would be in this position today, facing the choices that I face."

She did make decisions, only not one Labour wishes to publicize. Starting April 2029 UK workers as well as businesses will be paying an additional £26bn a year in taxes – but the majority of this will not go towards funding improved healthcare, public services, nor enhanced wellbeing. Whatever nonsense 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, over 50% of the additional revenue will instead provide Reeves a buffer against her self-imposed fiscal rules. Approximately 25% goes on covering the administration's policy reversals. Examining the OBR's calculations and giving maximum benefit of the doubt to Reeves, only 17% of the tax take will fund actual new spending, for example abolishing the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it had long been a bit of theatrical cruelty by George Osborne. A Labour government should have have binned it immediately upon taking office.

The Real Target: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have been barking about the idea that Reeves conforms to the stereotype of Labour chancellors, soaking strivers to fund the workshy. Party MPs are applauding her budget as a relief for their troubled consciences, safeguarding the disadvantaged. Each group are completely mistaken: Reeves's budget was largely aimed at asset managers, speculative capital and participants within the bond markets.

Downing Street can make a strong case in its defence. The forecasts provided by the OBR were insufficient for comfort, especially given that bond investors charge the UK the greatest borrowing cost of all G7 developed nations – higher than France, which lost a prime minister, higher than Japan which has way more debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan allows the central bank to reduce its key lending rate.

It's understandable that those wearing red rosettes may choose not to frame it in such terms when they visit the doorstep. According to one independent adviser for Downing Street puts it, Reeves has "weaponised" the bond market as a tool of discipline over her own party and the voters. It's why Reeves cannot resign, regardless of which pledges she breaks. It is also the reason Labour MPs must fall into line and support measures that cut billions from social security, just as Starmer indicated recently.

A Lack of Statecraft and an Unfulfilled Promise

What is absent here is the notion of statecraft, of mobilising the Treasury and the central bank to reach a new accommodation with markets. Also absent is any innate understanding of voters,