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The accusation is a serious one: that Rachel Reeves may have misled Britons, scaring them to accept massive extra taxes which would be used for increased welfare payments. While exaggerated, this is not usual political sparring; this time, the consequences are higher. A week ago, critics of Reeves alongside Keir Starmer were labeling their budget "a mess". Today, it's denounced as falsehoods, and Kemi Badenoch demanding the chancellor to quit.

This serious charge demands clear responses, so let me provide my assessment. Did the chancellor tell lies? Based on current information, no. There were no major untruths. However, despite Starmer's yesterday's comments, it doesn't follow that there's no issue here and we can all move along. The Chancellor did misinform the public about the factors informing her decisions. Was this all to channel cash to "benefits street", as the Tories claim? Certainly not, and the numbers demonstrate it.

A Standing Sustains Another Hit, Yet Truth Should Prevail

Reeves has taken another hit to her reputation, but, should facts continue to have anything to do with politics, Badenoch should call off her lynch mob. Perhaps the resignation yesterday of OBR head, Richard Hughes, over the leak of its internal documents will satisfy SW1's thirst for blood.

Yet the true narrative is much more unusual than the headlines indicate, extending broader and deeper beyond the political futures of Starmer and the 2024 intake. Fundamentally, herein lies an account about how much say the public get over the governance of the nation. This should should worry you.

Firstly, on to Brass Tacks

After the OBR released recently some of the projections it shared with Reeves as she prepared the red book, the shock was immediate. Not merely has the OBR not acted this way before (described as an "exceptional move"), its numbers seemingly contradicted Reeves's statements. Even as rumors from Westminster suggested how bleak the budget would have to be, the OBR's own forecasts were improving.

Consider the government's most "unbreakable" rule, that by 2030 daily spending for hospitals, schools, and other services must be completely funded by taxes: in late October, the watchdog calculated it would barely be met, albeit by a tiny margin.

A few days later, Reeves gave a press conference so extraordinary that it caused morning television to interrupt its usual fare. Weeks before the real budget, the nation was warned: taxes would rise, and the main reason being gloomy numbers provided by the OBR, specifically its finding that the UK was less efficient, investing more but getting less out.

And so! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested over the weekend, that is basically what transpired during the budget, that proved to be big and painful and bleak.

The Misleading Alibi

The way in which Reeves misled us was her alibi, because those OBR forecasts didn't compel her actions. She could have made different options; she could have given other reasons, including during the statement. Before last year's election, Starmer promised precisely this kind of public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it is a lack of agency that jumps out from Reeves's pre-budget speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces outside her influence: "Given the circumstances of the persistent challenges on our productivity … any finance minister of any political stripe would be in this position today, facing the decisions that I face."

She certainly make a choice, just not one Labour cares to broadcast. From April 2029 British workers and businesses will be contributing an additional £26bn annually in tax – and the majority of this will not go towards funding better hospitals, public services, or enhanced wellbeing. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of the extra cash will in fact provide Reeves cushion for her self-imposed fiscal rules. Approximately 25% is allocated to covering the government's own policy reversals. Examining the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the tax take will fund actual new spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always a bit of political theatre by George Osborne. This administration should have have binned it in its first 100 days.

The Real Target: The Bond Markets

Conservatives, Reform and all of Blue Pravda have spent days barking about the idea that Reeves conforms to the stereotype of left-wing finance ministers, taxing hard workers to spend on the workshy. Party MPs have been applauding her budget for being balm to their social concerns, safeguarding the disadvantaged. Both sides are completely mistaken: The Chancellor's budget was largely aimed at asset managers, speculative capital and participants within the financial markets.

Downing Street can make a strong case for itself. The margins from the OBR were insufficient to feel secure, especially given that lenders charge the UK the highest interest rate among G7 developed nations – higher than France, that recently lost its leader, higher than Japan which has far greater debt. Coupled with the measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan enables the Bank of England to reduce its key lending rate.

You can see that those wearing Labour badges might not couch it this way next time they visit the doorstep. According to a consultant for Downing Street says, Reeves has effectively "utilised" the bond market as a tool of discipline against Labour MPs and the voters. It's why the chancellor cannot resign, regardless of which promises she breaks. It's why Labour MPs must knuckle down and support measures to take billions off social security, as Starmer promised recently.

Missing Statecraft , an Unfulfilled Promise

What's missing from this is the notion of strategic governance, of harnessing the Treasury and the central bank to forge a new accommodation with markets. Also absent is any intuitive knowledge of voters,