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This accusation represents a grave matter: suggesting Rachel Reeves has lied to Britons, frightening them into accepting billions in extra taxes that would be spent on higher welfare payments. While hyperbolic, this isn't typical Westminster sparring; on this occasion, the stakes are more serious. Just last week, critics aimed at Reeves alongside Keir Starmer were calling their budget "a shambles". Now, it's branded as falsehoods, with Kemi Badenoch demanding Reeves to step down.

Such a grave charge requires straightforward answers, therefore let me provide my assessment. Did the chancellor been dishonest? Based on current evidence, no. She told no blatant falsehoods. However, despite Starmer's yesterday's comments, that doesn't mean there is nothing to see and we should move on. Reeves did mislead the public about the factors shaping her choices. Was it to funnel cash towards "welfare recipients", as the Tories claim? No, and the figures demonstrate this.

A Reputation Sustains Another Hit, Yet Truth Must Prevail

The Chancellor has sustained a further blow to her standing, however, should facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the stepping down recently of OBR head, Richard Hughes, over the unauthorized release of its own documents will satisfy SW1's thirst for blood.

Yet the real story is much more unusual than media reports suggest, and stretches wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is a story concerning what degree of influence the public get in the governance of our own country. This should should worry everyone.

Firstly, to Brass Tacks

After the OBR published recently some of the projections it provided to Reeves while she prepared the red book, the shock was instant. Not only has the OBR never done such a thing before (described as an "rare action"), its figures apparently went against the chancellor's words. Even as leaks from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were improving.

Consider the government's most "iron-clad" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest must be completely funded by taxes: in late October, the OBR reckoned it would just about be met, albeit only by a tiny margin.

A few days later, Reeves gave a media briefing so unprecedented it forced morning television to break from its regular schedule. Several weeks before the actual budget, the nation was warned: taxes would rise, with the main reason being gloomy numbers provided by the OBR, in particular its conclusion that the UK had become less productive, putting more in but getting less out.

And so! It came to pass. Notwithstanding what Telegraph editorials and Tory media appearances implied recently, that is basically what happened at the budget, which was big and painful and bleak.

The Misleading Alibi

Where Reeves deceived us concerned her justification, since these OBR forecasts didn't compel her actions. She could have chosen other choices; she could have provided alternative explanations, even on budget day itself. Prior to last year's election, Starmer promised exactly such people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that is evident in Reeves's breakfast speech. Our first Labour chancellor in 15 years casts herself as an apolitical figure buffeted by factors outside her influence: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She did make a choice, only not one the Labour party wishes to broadcast. Starting April 2029 British workers as well as businesses will be contributing an additional £26bn annually in tax – and the majority of this will not be funding improved healthcare, new libraries, nor enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "benefits street".

Where the Cash Actually Ends Up

Instead of going on services, over 50% of this extra cash will in fact give Reeves a buffer against her own budgetary constraints. About 25% goes on paying for the administration's policy reversals. Reviewing the OBR's calculations and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the taxes will fund genuinely additional spending, for example scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always a bit of political theatre from George Osborne. A Labour government should have abolished it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform and all of Blue Pravda have spent days barking about the idea that Reeves fits the stereotype of left-wing finance ministers, taxing hard workers to spend on shirkers. Labour backbenchers have been applauding her budget as balm for their troubled consciences, protecting the most vulnerable. Both sides could be 180-degrees wrong: Reeves's budget was primarily targeted towards asset managers, speculative capital and participants within the bond markets.

Downing Street could present a compelling argument in its defence. The margins from 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 a prime minister, higher than Japan which has far greater debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves can say their plan enables the Bank of England to cut interest rates.

You can see why those folk with Labour badges may choose not to couch it this way next time they're on #Labourdoorstep. As a consultant for Downing Street says, Reeves has effectively "utilised" the bond market to act as a tool of discipline against Labour MPs and the electorate. This is the reason Reeves cannot resign, no matter what promises she breaks. It is also the reason Labour MPs must fall into line and vote that cut billions from social security, just as Starmer promised recently.

Missing Statecraft and an Unfulfilled Promise

What is absent from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to reach a fresh understanding with markets. Also absent is any intuitive knowledge of voters,