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The charge represents a grave matter: that Rachel Reeves has misled UK citizens, scaring them into accepting billions in extra taxes which would be funneled into higher benefits. While exaggerated, this isn't typical Westminster bickering; on this occasion, the stakes are more serious. Just last week, critics aimed at Reeves and Keir Starmer were calling their budget "uncoordinated". Today, it's denounced as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

This serious accusation requires clear responses, so let me provide my view. Did the chancellor tell lies? On the available evidence, no. There were no whoppers. However, notwithstanding Starmer's recent comments, it doesn't follow that there is no issue here and we can all move along. Reeves did misinform the public about the factors informing her choices. Was this all to funnel cash to "welfare recipients", like the Tories assert? Certainly not, as the numbers demonstrate it.

A Standing Sustains A Further Blow, But Facts Should Win Out

Reeves has sustained a further hit to her standing, but, if facts still matter in politics, Badenoch ought to stand down her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its internal documents will satisfy Westminster's thirst for blood.

Yet the real story is much more unusual compared to media reports indicate, and stretches wider and further than the political futures of Starmer and the 2024 intake. Fundamentally, this is an account about how much say you and I have over the governance of our own country. And it concern everyone.

First, on to Brass Tacks

When the OBR released last Friday a portion of the forecasts it shared with Reeves as she wrote the budget, the surprise was instant. Not merely had the OBR never acted this way before (described as an "rare action"), its numbers seemingly contradicted the chancellor's words. While rumors from Westminster were about the grim nature of the budget was going to be, the watchdog's predictions were improving.

Consider the government's so-called "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and other services would be wholly funded by taxes: at the end of October, the OBR reckoned this would barely be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced breakfast TV to break from its usual fare. Weeks prior to the real budget, the nation was warned: taxes were going up, and the primary cause being pessimistic numbers from the OBR, in particular its conclusion suggesting the UK had become less efficient, putting more in but getting less out.

And lo! It happened. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested over the weekend, that is basically what happened at the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us was her alibi, because these OBR forecasts did not compel her actions. She might have made other choices; she could have provided other reasons, including during the statement. Before last year's election, Starmer pledged exactly such people power. "The promise of democracy. The power of the vote. The potential for national renewal."

A year on, and it's powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself to be a technocrat at the mercy of forces outside her influence: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She certainly make decisions, just not one Labour cares to publicize. From April 2029 British workers as well as businesses will be contributing another £26bn a year in taxes – but the majority of this will not be spent on improved healthcare, public services, or happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Cash Really Goes

Instead of going on services, over 50% of the additional revenue will in fact provide Reeves a buffer for her self-imposed fiscal rules. About 25% goes on paying for the administration's policy reversals. Examining 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. Its abolition "will cost" the Treasury only £2.5bn, because it had long been an act of political theatre from George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and all of right-wing media have been barking about how Reeves fits the caricature of left-wing finance ministers, taxing hard workers to spend on the workshy. Party MPs have been cheering her budget as a relief to their troubled consciences, safeguarding the disadvantaged. Each group could be completely mistaken: The Chancellor's budget was largely targeted towards investment funds, hedge funds and the others in 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 bond investors charge the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, which lost its leader, higher than Japan which has way more debt. Coupled with our measures to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the central bank to reduce interest rates.

It's understandable that those wearing Labour badges may choose not to couch it this way when they visit the doorstep. As a consultant for Downing Street puts it, Reeves has effectively "utilised" financial markets to act as an instrument of discipline over her own party and the electorate. It's why the chancellor cannot resign, no matter what promises are broken. It's the reason Labour MPs must knuckle down and support measures that cut billions from social security, as Starmer indicated yesterday.

Missing Statecraft and a Broken Pledge

What's missing here is any sense of statecraft, of harnessing the finance ministry and the central bank to reach a fresh understanding with investors. Missing too is any intuitive knowledge of voters,