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This charge carries significant weight: suggesting Rachel Reeves has misled Britons, scaring them to accept massive additional taxes which could be spent on higher welfare payments. While exaggerated, this isn't usual political sparring; this time, the stakes could be damaging. A week ago, detractors of Reeves and Keir Starmer were calling their budget "uncoordinated". Today, it is denounced as lies, and Kemi Badenoch demanding the chancellor's resignation.

Such a grave accusation requires clear answers, therefore let me provide my view. Did the chancellor tell lies? On current evidence, no. She told no blatant falsehoods. However, despite Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we should move on. The Chancellor did mislead the public regarding the factors informing her decisions. Was this all to funnel cash to "benefits street", like the Tories assert? Certainly not, as the numbers prove this.

A Standing Sustains Another Hit, Yet Truth Must Win Out

The Chancellor has taken a further hit to her standing, however, if facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will quench SW1's appetite for scandal.

But the true narrative is far stranger than media reports indicate, and stretches broader and deeper beyond the careers of Starmer and his 2024 intake. At its heart, this is a story concerning how much say you and I have over the governance of our own country. And it should worry everyone.

First, to the Core Details

When the OBR published recently some of the projections it shared with Reeves as she wrote the red book, the surprise was instant. Not merely has the OBR not acted this way before (described as an "exceptional move"), its figures apparently contradicted 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 improving.

Consider the government's most "unbreakable" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR reckoned it would just about be met, albeit only by a minuscule margin.

A few days later, Reeves gave a press conference so extraordinary that it caused breakfast TV to interrupt its regular schedule. Weeks before the actual budget, the country was put on alert: taxes would rise, with the primary cause being pessimistic numbers provided by the OBR, in particular its finding suggesting the UK was less productive, investing more but yielding less.

And so! It came to pass. Despite the implications from Telegraph editorials and Tory media appearances suggested over the weekend, this is essentially what transpired at the budget, which was big and painful and bleak.

The Deceptive Justification

Where Reeves deceived us was her alibi, since these OBR forecasts didn't compel her actions. She could have chosen different options; she could have provided alternative explanations, including on budget day itself. Prior to the recent election, Starmer promised exactly such people power. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it's powerlessness that jumps out in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as a technocrat at the mercy of forces beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any political stripe would be in this position today, facing the decisions that I face."

She did make decisions, only not one Labour cares to publicize. From April 2029 British workers and businesses will be paying another £26bn annually in taxes – but most of that will not be spent on improved healthcare, public services, nor happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Cash Really Goes

Rather than being spent, over 50% of the additional revenue will instead provide Reeves a buffer for her self-imposed fiscal rules. About 25% is allocated to paying for the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible to Reeves, a mere 17% of the taxes will go on 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 a bit of political theatre from George Osborne. This administration could and should have binned it immediately upon taking office.

The True Audience: Financial Institutions

Conservatives, Reform along with the entire Blue Pravda have been railing against how Reeves fits the stereotype of left-wing finance ministers, soaking strivers to spend on shirkers. Labour backbenchers are applauding her budget for being a relief for their social concerns, safeguarding the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was largely targeted towards investment funds, speculative capital and the others in the financial markets.

Downing Street could present a strong case for itself. The forecasts provided by the OBR were insufficient for comfort, particularly given that lenders demand from the UK the greatest borrowing cost among G7 rich countries – higher than France, which lost a prime minister, higher than Japan that carries far greater debt. Combined with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say this budget allows the Bank of England to cut its key lending rate.

You can see why those wearing Labour badges might not couch it in such terms when they visit the doorstep. According to a consultant for Downing Street puts it, Reeves has effectively "weaponised" the bond market to act as an instrument of control against Labour MPs and the voters. It's the reason Reeves can't resign, no matter what pledges are broken. It is also the reason Labour MPs will have to fall into line and vote that cut billions from 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 Treasury and the central bank to reach a new accommodation with markets. Also absent is intuitive knowledge of voters,