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This accusation represents a grave matter: suggesting Rachel Reeves has misled UK citizens, spooking them to accept massive extra taxes that could be used for higher welfare payments. While exaggerated, this is not usual Westminster sparring; this time, the stakes could be damaging. A week ago, critics of Reeves alongside Keir Starmer had been labeling their budget "a shambles". Today, it's branded as lies, with Kemi Badenoch calling for the chancellor's resignation.

This grave charge requires clear answers, therefore let me provide my view. Has the chancellor tell lies? On the available information, no. There were no blatant falsehoods. However, notwithstanding Starmer's recent remarks, that doesn't mean there's nothing to see and we can all move along. The Chancellor did mislead the public regarding the considerations informing her decisions. Was it to funnel cash to "welfare recipients", as the Tories assert? Certainly not, and the numbers prove this.

A Standing Sustains A Further Blow, But Facts Should Prevail

Reeves has taken a further blow to her standing, but, should facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the resignation recently of OBR head, Richard Hughes, due to the leak of its internal documents will quench SW1's thirst for blood.

Yet the real story is much more unusual compared to media reports suggest, and stretches broader and deeper than the careers of Starmer and his class of '24. At its heart, this is a story concerning how much say the public have in the governance of our own country. This should should worry everyone.

First, on to the Core Details

After the OBR released recently a portion of the projections it shared with Reeves while she wrote the red book, the shock was immediate. Not only had the OBR not done such a thing before (described as an "exceptional move"), its figures apparently went against the chancellor's words. While rumors from Westminster suggested how bleak the budget was going to be, the OBR's own predictions were improving.

Consider the Treasury'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 watchdog calculated it would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a press conference so unprecedented that it caused morning television to interrupt its regular schedule. Weeks before the actual budget, the nation was warned: taxes would rise, and the primary cause being pessimistic numbers provided by the OBR, specifically its finding that the UK was less efficient, investing more but getting less out.

And lo! It came to pass. Notwithstanding what Telegraph editorials combined with Tory broadcast rounds implied recently, this is basically what transpired at the budget, which was significant, harsh, and grim.

The Misleading Alibi

The way in which Reeves misled us was her justification, since these OBR forecasts did not compel her actions. She could have made other choices; she might have given alternative explanations, including during the statement. Prior to the recent election, Starmer promised precisely this kind of people power. "The promise of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it's a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years casts herself as a technocrat at the mercy of forces outside her influence: "Given the circumstances of the long-term challenges with our productivity … any finance minister of any party would be in this position today, facing the choices that I face."

She did make a choice, just not the kind the Labour party wishes to broadcast. Starting April 2029 British workers and businesses are set to be paying another £26bn annually in taxes – but most of that will not go towards spent on improved healthcare, new libraries, or happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of this extra cash will in fact provide Reeves a buffer against her own fiscal rules. About 25% goes on covering the administration's policy reversals. Examining the watchdog's figures and giving maximum benefit of the doubt towards Reeves, a mere 17% of the tax take will go on genuinely additional spending, such as abolishing the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it was always a bit of political theatre by George Osborne. This administration should have have binned it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with all of right-wing media have spent days railing against how Reeves fits the stereotype of Labour chancellors, taxing strivers to fund shirkers. Party MPs are cheering her budget as a relief to their social concerns, safeguarding the most vulnerable. Both sides are completely mistaken: Reeves's budget was largely targeted towards asset managers, speculative capital and participants within the bond markets.

The government can make a strong case in its defence. The margins provided by the OBR were insufficient for comfort, particularly considering bond investors demand from the UK the highest interest rate among G7 developed nations – higher than France, which lost its leader, and exceeding Japan which has far greater debt. Combined with our policies 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 why those wearing red rosettes might not couch it this way next time they visit the doorstep. As a consultant for Downing Street puts it, Reeves has "utilised" the bond market as an instrument of control against Labour MPs and the voters. This is the reason the chancellor cannot resign, no matter what pledges 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.

A Lack of Statecraft and a Broken Promise

What's missing here is any sense of statecraft, of mobilising the finance ministry and the Bank to reach a new accommodation with investors. Also absent is innate understanding of voters,