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This allegation carries significant weight: suggesting Rachel Reeves has misled UK citizens, frightening them to accept billions in extra taxes which could be funneled into higher welfare payments. However exaggerated, this is not typical political bickering; on this occasion, the consequences are more serious. Just last week, critics of Reeves alongside Keir Starmer had been labeling their budget "uncoordinated". Now, it's denounced as lies, with Kemi Badenoch demanding the chancellor's resignation.

Such a serious accusation requires clear answers, therefore let me provide my view. Has the chancellor tell lies? Based on current information, apparently not. There were no whoppers. But, despite Starmer's yesterday's remarks, that doesn't mean there's nothing to see and we should move on. The Chancellor did misinform the public about the considerations shaping her decisions. Was it to channel cash towards "welfare recipients", as the Tories claim? No, as the figures demonstrate this.

A Standing Sustains Another Hit, But Facts Should Win Out

The Chancellor has taken another blow to her reputation, however, if facts still matter in politics, Badenoch should stand down her attack dogs. Maybe the resignation yesterday of OBR head, Richard Hughes, over the unauthorized release of its own documents will quench Westminster's appetite for scandal.

Yet the true narrative is far stranger compared to media reports indicate, extending wider and further than the careers of Starmer and the class of '24. Fundamentally, this is a story about what degree of influence the public get over the governance of our own country. This should concern you.

Firstly, to the Core Details

When the OBR published last Friday a portion of the forecasts it provided to Reeves as she wrote the red book, the shock was immediate. Not only had the OBR never done such a thing before (an "rare action"), its figures apparently went against Reeves's statements. While leaks from Westminster were about how bleak the budget was going to be, the watchdog's predictions were getting better.

Take the government's so-called "unbreakable" fiscal rule, stating by 2030 daily spending on hospitals, schools, and the rest must be wholly paid for by taxes: in late October, the watchdog reckoned it would barely be met, albeit only by a tiny margin.

Several days later, Reeves held a press conference so unprecedented it forced morning television to interrupt its usual fare. Weeks before the real budget, the nation was put on alert: taxes were going up, with the main reason cited as gloomy numbers provided by the OBR, specifically its finding suggesting the UK was less productive, putting more in but yielding less.

And lo! It came to pass. Despite what Telegraph editorials and Tory media appearances suggested over the weekend, that is essentially what happened during the budget, which was big and painful and bleak.

The Deceptive Alibi

Where Reeves misled us was her alibi, because these OBR forecasts did not force her hand. She could 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 hope of democracy. The power of the vote. The potential for national renewal."

A year on, and it is a lack of agency that jumps out from Reeves's pre-budget speech. The first Labour chancellor in 15 years casts herself to be an apolitical figure buffeted by forces outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any party would be standing here today, confronting the choices that I face."

She did make a choice, just not the kind Labour cares to broadcast. From April 2029 UK workers as well as businesses are set to be contributing an additional £26bn annually in taxes – but most of that will not go towards funding improved healthcare, public services, nor happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Money Actually Ends Up

Instead of being spent, more than 50% of the additional revenue will instead give Reeves cushion against her self-imposed fiscal rules. About 25% goes on paying for the government's own U-turns. Reviewing the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the taxes will go on genuinely additional spending, such as scrapping the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always an act of theatrical cruelty from George Osborne. This administration should have have binned it immediately upon taking office.

The True Audience: The Bond Markets

Conservatives, Reform along with all of Blue Pravda have been railing against how Reeves conforms to the caricature of Labour chancellors, taxing strivers to spend on shirkers. Labour backbenchers are cheering her budget as a relief for their troubled consciences, safeguarding the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and participants within the bond markets.

Downing Street can make a strong case in its defence. The forecasts from the OBR were too small for comfort, particularly considering bond investors charge the UK the highest interest rate of all G7 developed nations – exceeding that of France, which lost its leader, and exceeding Japan that carries far greater debt. Coupled with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say this budget enables the central bank to reduce interest rates.

You can see why those wearing red rosettes might not couch it this way when they visit the doorstep. As one independent adviser to Downing Street says, Reeves has "utilised" financial markets as a tool of control over her own party and the voters. It's why Reeves cannot resign, regardless of which promises she breaks. It's why Labour MPs must knuckle down and support measures that cut billions from social security, just as Starmer indicated yesterday.

Missing Statecraft , a Broken Pledge

What's missing from this is the notion of strategic governance, of mobilising the Treasury and the central bank to forge a new accommodation with investors. Also absent is any innate understanding of voters,