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This allegation is a serious one: suggesting Rachel Reeves has misled the British public, scaring them to accept billions in additional taxes which could be used for higher benefits. While exaggerated, this is not usual political bickering; this time, the stakes are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer had been calling their budget "a mess". Today, it is denounced as lies, with Kemi Badenoch calling for the chancellor's resignation.

This serious accusation requires straightforward responses, therefore here is my view. Did the chancellor been dishonest? On current evidence, no. There were no whoppers. But, despite Starmer's yesterday's remarks, that doesn't mean there is nothing to see and we should move on. Reeves did mislead the public regarding the factors shaping her decisions. Was it to channel cash to "welfare recipients", as the Tories claim? Certainly not, and the numbers prove this.

A Reputation Takes Another Hit, Yet Truth Must Prevail

The Chancellor has sustained a further blow to her standing, however, should facts still 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 own documents will quench SW1's appetite for scandal.

But the true narrative is much more unusual than the headlines suggest, and stretches broader and deeper than the careers of Starmer and the 2024 intake. Fundamentally, herein lies a story concerning what degree of influence you and I get over the governance of our own country. This should concern you.

First, on to Brass Tacks

When the OBR published recently a portion of the projections it provided to Reeves as she wrote the budget, the surprise was immediate. Not only had the OBR not acted this way before (an "unusual step"), its numbers seemingly went against Reeves's statements. While leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were improving.

Take the government's so-called "iron-clad" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR reckoned this would just about be met, albeit only by a minuscule margin.

A few days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to break from its usual fare. Weeks before the actual budget, the nation was warned: taxes would rise, with the main reason being gloomy numbers from the OBR, specifically its finding suggesting the UK had become less productive, putting more in but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials combined with Tory media appearances implied over the weekend, this is basically what transpired during the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us was her justification, because these OBR forecasts didn't force her hand. 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 hope of democracy. The power of the vote. The potential for national renewal."

One year later, and it's a lack of agency that is evident in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half casts herself as an apolitical figure buffeted by factors beyond her control: "In the context of the persistent challenges on our productivity … any finance minister of any political stripe would be standing here today, confronting the decisions that I face."

She certainly make decisions, just not one Labour cares to broadcast. From April 2029 British workers and businesses are set to be paying an additional £26bn a year in taxes – but the majority of this will not go towards spent on better hospitals, new libraries, or happier lives. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Money Actually Ends Up

Instead of being spent, more than 50% of this additional revenue will in fact provide Reeves cushion against her self-imposed fiscal rules. About 25% goes on covering the administration's policy reversals. Reviewing the OBR's calculations and being as generous as possible towards Reeves, only 17% of the tax take will go on actual new spending, such as abolishing the limit on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always an act of theatrical cruelty by George Osborne. A Labour government should have have binned it in its first 100 days.

The Real Target: Financial Institutions

Conservatives, Reform and the entire right-wing media have been railing against the idea that Reeves conforms to the caricature of left-wing finance ministers, taxing strivers to spend on shirkers. Party MPs have been cheering her budget for being balm to their troubled consciences, safeguarding the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and participants within the bond markets.

The government could present a compelling argument in its defence. The forecasts provided by the OBR were too small for comfort, particularly given that bond investors charge the UK the greatest borrowing cost of all G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan that carries far greater debt. Combined with the policies to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan enables the central bank to reduce its key lending rate.

It's understandable that those folk with Labour badges might not frame it this way next time they're on the doorstep. As one independent adviser to Downing Street says, Reeves has "weaponised" financial markets as a tool of control over Labour MPs and the voters. It's the reason Reeves cannot resign, no matter what promises she breaks. It is also the reason Labour MPs must fall into line and support measures to take billions off social security, as Starmer promised recently.

Missing Statecraft and an Unfulfilled Promise

What is absent here is the notion of statecraft, of harnessing the finance ministry and the central bank to forge a new accommodation with investors. Missing too is any innate understanding of voters,