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This allegation is a serious one: that Rachel Reeves may have misled Britons, spooking them into accepting billions in extra taxes which would be used for increased welfare payments. While exaggerated, this is not usual Westminster bickering; this time, the consequences are more serious. Just last week, critics aimed at Reeves alongside Keir Starmer were labeling their budget "a mess". Now, it's denounced as lies, with Kemi Badenoch calling for the chancellor's resignation.

This grave charge demands straightforward answers, therefore here is my assessment. Has the chancellor been dishonest? Based on current evidence, apparently not. There were no blatant falsehoods. But, despite Starmer's yesterday's comments, that doesn't mean there is no issue here and we should move on. The Chancellor did mislead the public regarding the considerations informing her choices. Was this all to channel cash towards "benefits street", like the Tories claim? No, as the figures prove it.

A Reputation Takes A Further Hit, But Facts Should Win Out

Reeves has sustained another hit to her reputation, but, if facts continue to matter in politics, Badenoch should stand down her attack dogs. Maybe the stepping down yesterday of OBR head, Richard Hughes, due to the leak of its own documents will quench SW1's appetite for scandal.

Yet the true narrative is far stranger compared to the headlines indicate, extending wider and further than the political futures of Starmer and the 2024 intake. At its heart, herein lies a story concerning what degree of influence the public have over the governance of the nation. This should should worry everyone.

First, to Brass Tacks

When the OBR released recently some of the projections it shared with Reeves as she wrote the budget, the surprise was instant. Not merely had the OBR not acted this way before (an "unusual step"), its figures apparently contradicted Reeves's statements. Even as rumors from Westminster suggested the grim nature of the budget would have to be, the watchdog's forecasts were improving.

Consider the government's so-called "iron-clad" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest must be completely funded by taxes: in late October, the OBR reckoned this would barely be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to interrupt its regular schedule. Weeks prior to the actual budget, the nation was put on alert: taxes would rise, with the primary cause being pessimistic numbers provided by the OBR, specifically its finding suggesting the UK was less efficient, investing more but yielding less.

And so! It happened. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances suggested recently, that is basically what transpired at the budget, which was big and painful and bleak.

The Misleading Alibi

The way in which Reeves misled us was her alibi, because these OBR forecasts did not compel her actions. She could have made different options; she could have provided alternative explanations, even during the statement. Prior to the recent election, Starmer pledged precisely this kind of people power. "The promise of democracy. The strength of the vote. The potential for national renewal."

A year on, and it is a lack of agency that jumps out from Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself as a technocrat buffeted by factors outside her influence: "In the context of the persistent challenges with our productivity … any finance minister of any party would be in this position today, confronting the decisions that I face."

She did make a choice, just not the kind the Labour party cares to broadcast. Starting April 2029 UK workers and businesses are set to be paying an additional £26bn a year in taxes – but the majority of this will not go towards funding improved healthcare, public services, or enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Money Really Goes

Rather than going on services, over 50% of the extra cash will instead give Reeves a buffer for her self-imposed fiscal rules. Approximately 25% is allocated to covering the government's own policy reversals. Reviewing the OBR's calculations and being as generous as possible towards a Labour chancellor, only 17% of the taxes will fund actual new spending, such as scrapping the two-child cap on child benefit. Removing it "will cost" the Treasury only £2.5bn, as it was always a bit of political theatre from George Osborne. This administration should have have binned it immediately upon taking office.

The True Audience: Financial Institutions

The Tories, Reform along with the entire right-wing media have been barking about the idea that Reeves fits the caricature of left-wing finance ministers, soaking hard workers to fund the workshy. Party MPs have been applauding her budget as a relief for their social concerns, safeguarding the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was largely targeted towards investment funds, speculative capital and the others in the bond markets.

Downing Street can make a strong case in its defence. The forecasts from the OBR were deemed too small for comfort, particularly given that lenders charge the UK the greatest borrowing cost among G7 developed nations – higher than France, that recently lost a prime minister, and exceeding Japan that carries way more debt. Coupled with our measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget allows the Bank of England to reduce its key lending rate.

You can see that those wearing Labour badges may choose not to couch it this way when they visit the doorstep. As a consultant to Downing Street says, Reeves has effectively "utilised" financial markets to act as an instrument of control against Labour MPs and the voters. This is why the chancellor cannot resign, no matter what promises are broken. It is also the reason Labour MPs will have to fall into line and support measures that cut billions from social security, as Starmer promised yesterday.

Missing Political Vision and a Broken Promise

What's missing here is any sense of statecraft, of harnessing the Treasury and the central bank to reach a fresh understanding with investors. Also absent is intuitive knowledge of voters,