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The charge is a serious one: that Rachel Reeves may have misled the British public, frightening them into accepting massive additional taxes which would be funneled into higher welfare payments. However hyperbolic, this isn't usual political sparring; on this occasion, the stakes are higher. A week ago, critics of Reeves and Keir Starmer had been labeling their budget "uncoordinated". Now, it is branded as lies, with Kemi Badenoch demanding Reeves to step down.

Such a serious accusation requires clear answers, therefore let me provide my assessment. Did the chancellor lied? Based on the available information, apparently not. There were no whoppers. But, despite Starmer's recent remarks, that doesn't mean there's nothing to see and we can all move along. Reeves did misinform the public about the considerations informing her decisions. Was it to channel cash towards "welfare recipients", like the Tories assert? Certainly not, and the figures prove it.

A Reputation Sustains Another Blow, Yet Truth Must Prevail

Reeves has sustained a further hit to her reputation, but, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the resignation yesterday of OBR head, Richard Hughes, due to the leak of its own documents will satisfy SW1's appetite for scandal.

Yet the true narrative is far stranger compared to media reports suggest, and stretches broader and deeper beyond the careers of Starmer and his class of '24. Fundamentally, this is an account concerning what degree of influence the public get over the governance of the nation. And it concern everyone.

Firstly, on to the Core Details

When the OBR published recently a portion of the projections it provided to Reeves as she prepared the red book, the shock was instant. Not merely has the OBR never done such a thing before (an "exceptional move"), its numbers apparently went against Reeves's statements. Even as leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were getting better.

Take the government's most "unbreakable" rule, that by 2030 day-to-day spending on hospitals, schools, and other services would be completely funded by taxes: at the end of October, the watchdog calculated it would just about be met, albeit by a tiny margin.

A few days later, Reeves held a press conference so extraordinary it forced morning television to interrupt its regular schedule. Several weeks before the real budget, the nation was put on alert: taxes would rise, and the main reason being pessimistic numbers from the OBR, in particular its finding that the UK had become less productive, putting more in but yielding less.

And lo! It came to pass. Despite what Telegraph editorials and Tory broadcast rounds suggested recently, that is basically what happened at the budget, which was big and painful and bleak.

The Deceptive Alibi

Where Reeves misled us concerned her alibi, because these OBR forecasts did not compel her actions. She might have chosen other choices; she could have given alternative explanations, including on budget day itself. Before the recent election, Starmer promised exactly such public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, and it is powerlessness that is evident from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself as an apolitical figure at the mercy of factors beyond her control: "In the context of the persistent challenges on our productivity … any chancellor of any party would be standing here today, facing the choices that I face."

She certainly make decisions, only not the kind the Labour party wishes to publicize. From April 2029 British workers as well as businesses will be paying an additional £26bn annually in taxes – and most of that will not go towards funding improved healthcare, public services, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Cash Really Goes

Instead of going on services, over 50% of this additional revenue will instead provide Reeves a buffer against her self-imposed fiscal rules. Approximately 25% is allocated to covering the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible towards a Labour chancellor, a mere 17% of the tax take will go on genuinely additional spending, for example abolishing the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, because it was always an act of theatrical cruelty from George Osborne. This administration could and should have binned it immediately upon taking office.

The True Audience: Financial Institutions

Conservatives, Reform along with all of Blue Pravda have spent days barking about how Reeves fits the caricature of left-wing finance ministers, soaking strivers to spend on the workshy. Party MPs are cheering her budget for being a relief to their troubled consciences, protecting the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was primarily aimed at investment funds, hedge funds and participants within the bond markets.

Downing Street can make a compelling argument for itself. The forecasts provided by the OBR were too small for comfort, particularly considering bond investors charge the UK the greatest borrowing cost among G7 developed nations – higher than France, that recently lost a prime minister, and exceeding Japan which has way more debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the central bank to cut its key lending rate.

You can see that those wearing red rosettes may choose not to frame it this way next time they visit the doorstep. According to one independent adviser for Downing Street says, Reeves has "utilised" the bond market as a tool of control against Labour MPs and the electorate. This is the reason the chancellor can't resign, regardless of which promises she breaks. It is also why Labour MPs must knuckle down and support measures to take billions off social security, as Starmer indicated recently.

Missing Statecraft and an Unfulfilled Promise

What is absent from this is the notion of statecraft, of harnessing the Treasury and the Bank to forge a new accommodation with markets. Also absent is intuitive knowledge of voters,