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The accusation is a serious one: that Rachel Reeves may have lied to UK citizens, spooking them to accept massive extra taxes which could be used for higher benefits. However hyperbolic, this isn't typical political sparring; this time, the stakes are more serious. Just last week, detractors aimed at Reeves and Keir Starmer had been calling their budget "a mess". Now, it is branded as lies, with Kemi Badenoch calling for the chancellor's resignation.

Such a serious charge requires straightforward answers, so let me provide my assessment. Has the chancellor lied? On the available information, no. There were no blatant falsehoods. However, despite Starmer's yesterday's comments, that doesn't mean there's nothing to see and we can all move along. Reeves did mislead the public about the considerations shaping her choices. Was it to channel cash towards "welfare recipients", like the Tories claim? No, and the figures demonstrate this.

A Reputation Sustains A Further Blow, But Facts Must Prevail

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

But the true narrative is far stranger compared to the headlines indicate, extending wider and further than the political futures of Starmer and the class of '24. At its heart, herein lies a story about what degree of influence the public get in the running of the nation. And it concern you.

Firstly, on to Brass Tacks

When the OBR released recently some of the forecasts it shared with Reeves while she prepared the budget, the surprise was instant. Not merely has the OBR never acted this way before (described as an "exceptional move"), its numbers seemingly went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget was going to be, the OBR's own forecasts were getting better.

Take the government's most "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the watchdog reckoned this would just about be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced morning television to interrupt its usual fare. Weeks prior to the actual budget, the country was put on alert: taxes would rise, and the main reason being gloomy numbers from the OBR, in particular its finding that the UK was less efficient, putting more in but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials and Tory broadcast rounds implied over the weekend, this is basically what transpired during the budget, which was big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us was her justification, because these OBR forecasts didn't compel her actions. She might have chosen other choices; she might have provided other reasons, even during the statement. Prior to the recent election, Starmer pledged exactly such people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it is a lack of agency that jumps out in Reeves's breakfast speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by factors outside her influence: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, confronting the choices that I face."

She certainly make decisions, only not the kind the Labour party cares to broadcast. Starting April 2029 UK workers and businesses will be contributing an additional £26bn a year in taxes – and the majority of this will not go towards spent on improved healthcare, new libraries, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Rather than being spent, more than 50% of this additional revenue will instead give Reeves cushion for her own fiscal rules. About 25% is allocated to paying for the administration's policy reversals. Examining the watchdog's figures and being as generous as possible towards a Labour chancellor, only 17% of the taxes will fund actual new spending, for example abolishing the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it had long been an act of political theatre by George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform along with the entire Blue Pravda have been railing against the idea that Reeves fits the caricature of Labour chancellors, taxing strivers to fund shirkers. Labour backbenchers are applauding her budget as balm to their troubled consciences, protecting the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was largely aimed at investment funds, hedge funds and the others in the bond markets.

The government could present a strong case in its defence. The margins from the OBR were deemed insufficient for comfort, particularly given that bond investors demand from the UK the highest interest rate among G7 rich countries – higher than France, which lost its leader, higher than Japan which has far greater debt. Combined with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan allows the Bank of England to cut interest rates.

It's understandable that those wearing Labour badges may choose not to couch it in such terms next time they're on the doorstep. According to one independent adviser to Downing Street puts it, Reeves has "utilised" financial markets as an instrument of discipline over her own party and the voters. It's why the chancellor cannot resign, regardless of which promises are broken. It's why Labour MPs must fall into line and vote to take billions off social security, as Starmer promised yesterday.

A Lack of Statecraft , a Broken Promise

What's missing here is the notion of statecraft, of harnessing the Treasury and the Bank to forge a fresh understanding with investors. Missing too is innate understanding of voters,