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This accusation carries significant weight: that Rachel Reeves has misled the British public, frightening them to accept massive additional taxes that would be spent on higher benefits. However hyperbolic, this is not typical Westminster bickering; on this occasion, the consequences are more serious. Just last week, detractors of Reeves alongside Keir Starmer were calling their budget "disorderly". Today, it's branded as lies, with Kemi Badenoch demanding the chancellor's resignation.

This serious accusation demands straightforward responses, so let me provide my assessment. Did the chancellor been dishonest? On the available information, apparently not. She told no blatant falsehoods. However, despite Starmer's recent remarks, that doesn't mean there's nothing to see and we should move on. Reeves did misinform the public about the factors shaping her decisions. Was this all to channel cash towards "benefits street", as the Tories assert? No, and the numbers demonstrate this.

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

Reeves has sustained another hit to her reputation, however, should facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will quench SW1's thirst for blood.

But the real story is much more unusual than the headlines indicate, extending broader and deeper than the political futures of Starmer and the 2024 intake. Fundamentally, herein lies an account about what degree of influence the public have in the governance of our own country. This should concern you.

Firstly, on to Brass Tacks

After the OBR released last Friday some of the projections it shared with Reeves as she prepared the budget, the shock was instant. Not merely had the OBR not done such a thing before (an "exceptional move"), its figures apparently contradicted Reeves's statements. Even as rumors from Westminster suggested how bleak the budget would have to be, the watchdog's forecasts were getting better.

Consider the government's so-called "iron-clad" rule, that by 2030 day-to-day spending on hospitals, schools, and other services would be completely funded by taxes: in late October, the OBR calculated it would just about be met, albeit by a tiny margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to interrupt its regular schedule. Weeks before the actual budget, the nation was put on alert: taxes were going up, with the primary cause being pessimistic numbers from the OBR, specifically its conclusion suggesting the UK had become less productive, investing more but yielding less.

And lo! It happened. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds suggested over the weekend, this is basically what transpired during the budget, which was significant, harsh, and grim.

The Misleading Justification

The way in which Reeves misled us was her alibi, because these OBR forecasts didn't force her hand. She might have chosen other choices; she might have provided alternative explanations, including during the statement. Prior to the recent election, Starmer promised precisely this kind of people power. "The promise of democracy. The power of the vote. The potential for national renewal."

One year later, and it is powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself as a technocrat at the mercy of forces beyond her control: "In the context of the long-term 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 wishes to broadcast. From April 2029 British workers and businesses will be paying an additional £26bn a year in tax – but most of that will not go towards spent on improved healthcare, new libraries, nor enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Cash Actually Ends Up

Instead of going on services, over 50% of the extra cash will instead provide Reeves a buffer for her self-imposed fiscal rules. Approximately 25% goes on paying for the government's own policy reversals. Examining the OBR's calculations and being as generous as possible towards a Labour chancellor, a mere 17% of the tax take will go on actual new spending, for example scrapping the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, because it had long been a bit of political theatre by George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and the entire Blue Pravda have been barking about the idea that Reeves fits the caricature of Labour chancellors, soaking strivers to spend on the workshy. Party MPs are cheering her budget as balm to their social concerns, safeguarding the disadvantaged. Both sides could be completely mistaken: The Chancellor's budget was primarily targeted towards asset managers, speculative capital and the others in the bond markets.

The government could present a strong case in its defence. The margins provided by the OBR were deemed insufficient for comfort, particularly given that bond investors demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, which lost a prime minister, higher than Japan which has far greater debt. Combined with the measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget allows the central bank to reduce its key lending rate.

It's understandable that those folk with red rosettes might not frame it this way when they're on the doorstep. As one independent adviser to Downing Street says, Reeves has effectively "utilised" financial markets to act as a tool of control against Labour MPs and the electorate. This is the reason Reeves can't resign, no matter what pledges she breaks. It is also why Labour MPs will have to knuckle down and support measures that cut billions from social security, just as Starmer indicated recently.

Missing Political Vision , a Broken Pledge

What is absent from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to forge a fresh understanding with markets. Missing too is innate understanding of voters,