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This accusation is a serious one: suggesting Rachel Reeves has misled Britons, scaring them into accepting massive extra taxes that would be funneled into higher welfare payments. While hyperbolic, this is not usual Westminster sparring; this time, the consequences are more serious. A week ago, detractors aimed at Reeves and Keir Starmer had been calling their budget "a shambles". Now, it is denounced as falsehoods, and Kemi Badenoch demanding Reeves to step down.

Such a serious charge requires clear answers, so let me provide my view. Has the chancellor lied? On the available information, apparently not. There were no major untruths. However, notwithstanding Starmer's yesterday's comments, it doesn't follow that there is no issue here and we can all move along. The Chancellor did mislead the public about the considerations shaping her decisions. Was it to channel cash towards "benefits street", like the Tories claim? Certainly not, and the numbers demonstrate it.

A Reputation Takes A Further Blow, Yet Truth Should Win Out

The Chancellor has taken another hit to her standing, however, should facts still have anything to do with politics, Badenoch should stand down her lynch mob. Perhaps the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

Yet the true narrative is much more unusual compared to media reports suggest, extending broader and deeper beyond the careers of Starmer and the 2024 intake. Fundamentally, herein lies a story about what degree of influence the public get in the governance of the nation. And it should worry everyone.

Firstly, on to Brass Tacks

After the OBR published recently some of the projections it provided to Reeves while she prepared the budget, the surprise was instant. Not merely has the OBR not done such a thing before (an "exceptional move"), its numbers seemingly went against the chancellor's words. While rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Take the Treasury's most "unbreakable" rule, stating by 2030 daily spending for hospitals, schools, and the rest would be wholly funded by taxes: in late October, the watchdog reckoned this would barely be met, albeit only by a minuscule margin.

Several days later, Reeves gave a press conference so unprecedented that it caused breakfast TV to break from its regular schedule. Several weeks before the real budget, the nation was put on alert: taxes would rise, with the main reason cited as gloomy numbers provided by the OBR, specifically its conclusion suggesting the UK had become less productive, investing more but yielding less.

And so! It came to pass. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds suggested recently, this is essentially what happened at the budget, which was significant, harsh, and grim.

The Misleading Alibi

Where Reeves misled us concerned her alibi, since these OBR forecasts didn't compel her actions. She could have chosen different options; she could have provided other reasons, even during the statement. Before last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it's powerlessness that jumps out from Reeves's pre-budget speech. The first Labour chancellor in 15 years portrays herself as an apolitical figure buffeted by forces outside her influence: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any political stripe would be standing here today, facing the choices that I face."

She certainly make a choice, only not one the Labour party wishes to broadcast. Starting April 2029 UK workers and businesses are set to be paying an additional £26bn a year in tax – and the majority of this will not be spent on improved healthcare, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Instead of being spent, over 50% of the extra cash will instead provide Reeves cushion against her own budgetary constraints. About 25% is allocated to paying for the administration's U-turns. Examining the OBR's calculations and being as generous as possible towards Reeves, a mere 17% of the tax take will fund actual new spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, because it was always an act of political theatre by George Osborne. This administration should have abolished it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform along with all of Blue Pravda have been railing against the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to fund shirkers. Party MPs have been cheering her budget for being a relief for their social concerns, safeguarding the disadvantaged. Each group could be 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and participants within the financial markets.

The government could present a compelling argument in its defence. The margins provided by the OBR were insufficient for comfort, especially considering lenders charge the UK the highest interest rate among G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan that carries way more debt. Coupled with the measures to cap fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan enables the Bank of England to reduce interest rates.

It's understandable that those folk with red rosettes might not couch it this way when they're on the doorstep. According to a consultant for Downing Street puts it, Reeves has "weaponised" financial markets as an instrument of control over Labour MPs and the electorate. This is the reason Reeves can't resign, regardless of which promises she breaks. It is also the reason Labour MPs must fall into line and vote to take billions off social security, as Starmer indicated recently.

A Lack of Political Vision , a Broken Pledge

What's missing here is the notion of statecraft, of mobilising the finance ministry and the Bank to reach a new accommodation with investors. Missing too is any innate understanding of voters,