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This accusation is a serious one: that Rachel Reeves may have misled UK citizens, spooking them to accept massive additional taxes that could be funneled into increased welfare payments. While hyperbolic, this isn't usual political bickering; this time, the consequences could be damaging. Just last week, critics aimed at Reeves alongside Keir Starmer had been labeling their budget "uncoordinated". Now, it's branded as falsehoods, and Kemi Badenoch demanding Reeves to step down.

This grave accusation requires clear responses, so let me provide my view. Has the chancellor lied? On the available evidence, apparently not. There were no blatant falsehoods. However, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there's no issue here and we should move on. Reeves did misinform the public about the considerations shaping her decisions. Was this all to channel cash towards "welfare recipients", as the Tories assert? Certainly not, and the figures prove this.

A Standing Takes Another Hit, Yet Truth Must Prevail

Reeves has sustained a further hit to her standing, but, if facts continue to have anything to do with politics, Badenoch should call off her attack dogs. Perhaps the stepping down yesterday of OBR head, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

But the true narrative is far stranger than the headlines suggest, and stretches broader and deeper beyond the political futures of Starmer and his class of '24. At its heart, herein lies an account about what degree of influence the public have over the running of the nation. This should concern you.

Firstly, on to Brass Tacks

When the OBR published last Friday some of the forecasts it provided to Reeves as she prepared the red book, the shock was immediate. Not only has the OBR never acted this way before (described as an "exceptional move"), its figures apparently went against Reeves's statements. Even as rumors from Westminster suggested how bleak the budget would have to be, the watchdog's forecasts were getting better.

Consider the government's so-called "iron-clad" rule, stating by 2030 day-to-day spending for hospitals, schools, and other services must be completely funded by taxes: in late October, the watchdog reckoned it would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to interrupt its regular schedule. Several weeks before the actual budget, the country was put on alert: taxes were going up, and the primary cause being pessimistic numbers provided by the OBR, specifically its finding suggesting the UK was less efficient, putting more in but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory media appearances implied over the weekend, this is basically what happened at the budget, which was big and painful and bleak.

The Deceptive Alibi

The way in which Reeves deceived us was her alibi, because those OBR forecasts did not force her hand. She could have chosen other choices; she might have provided alternative explanations, including during the statement. Prior to last year's election, Starmer promised precisely this kind of public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that is evident from Reeves's pre-budget speech. The first Labour chancellor for a decade and a half casts herself to be a technocrat buffeted by forces beyond her control: "In the context of the persistent challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She certainly make decisions, just not one the Labour party wishes to broadcast. Starting April 2029 UK workers and businesses are set to be paying another £26bn annually in tax – but most of that will not be spent on improved healthcare, new libraries, nor happier lives. Whatever bilge is spouted by Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Cash Really Goes

Instead of being spent, more than 50% of this extra cash will in fact provide Reeves cushion against her self-imposed budgetary constraints. Approximately 25% is allocated to paying for the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible towards a Labour chancellor, only 17% of the tax take will fund genuinely additional spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, because it had long been a bit of theatrical cruelty by George Osborne. This administration should have abolished it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform along with all of Blue Pravda have spent days railing against the idea that Reeves fits the stereotype of left-wing finance ministers, soaking hard workers to fund the workshy. Party MPs are cheering her budget for being balm for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: Reeves's budget was largely targeted towards investment funds, speculative capital and the others in the bond markets.

The government can make a compelling argument for itself. The forecasts from the OBR were deemed insufficient to feel secure, particularly given that lenders demand from the UK the highest interest rate of all G7 rich countries – higher than France, that recently lost its leader, and exceeding Japan that carries way more debt. Coupled with the policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves argue this budget enables the central bank to reduce interest rates.

It's understandable why those wearing Labour badges may choose not to frame it this way when they visit the doorstep. As one independent adviser to Downing Street says, Reeves has effectively "weaponised" the bond market to act as an instrument of discipline against Labour MPs and the voters. This is the reason Reeves cannot resign, no matter what promises are broken. It is also why Labour MPs must knuckle down and support measures that cut billions from social security, just as Starmer promised recently.

A Lack of Statecraft and a Broken Promise

What's missing from this is any sense of statecraft, of harnessing the finance ministry and the Bank to forge a new accommodation with markets. Missing too is any intuitive knowledge of voters,