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The allegation is a serious one: suggesting Rachel Reeves may have lied to Britons, scaring them into accepting massive additional taxes that would be used for increased welfare payments. However exaggerated, this is not usual Westminster sparring; on this occasion, the stakes could be damaging. Just last week, detractors aimed at Reeves and Keir Starmer were calling their budget "a shambles". Today, it's denounced as falsehoods, with Kemi Badenoch calling for Reeves to step down.

This grave accusation demands clear answers, therefore here is my assessment. Did the chancellor lied? Based on current evidence, apparently not. There were no major untruths. However, notwithstanding Starmer's recent comments, it doesn't follow that there is no issue here and we can all move along. The Chancellor did mislead the public regarding the factors shaping her decisions. Was this all to channel cash to "welfare recipients", like the Tories assert? No, as the numbers prove it.

A Reputation Takes Another Blow, But Facts Must Win Out

Reeves has sustained another hit to her reputation, but, if facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's thirst for blood.

Yet the true narrative is much more unusual compared to media reports indicate, extending broader and deeper than the political futures of Starmer and the class of '24. Fundamentally, this is a story concerning what degree of influence you and I have over the running of the nation. This should should worry everyone.

First, on to the Core Details

After the OBR published recently some of the projections it provided to Reeves as she prepared the red book, the shock was instant. Not merely has the OBR never acted this way before (described as an "exceptional move"), its numbers seemingly contradicted Reeves's statements. While rumors from Westminster suggested how bleak the budget would have to be, the OBR's own predictions were improving.

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

Several days later, Reeves held a media briefing so unprecedented it forced morning television to break from its regular schedule. Weeks before the real budget, the country was put on alert: taxes would rise, and the main reason cited as pessimistic numbers from 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. Despite what Telegraph editorials combined with Tory broadcast rounds suggested recently, this is essentially what happened during the budget, that proved to be big and painful and bleak.

The Misleading Alibi

The way in which Reeves misled us concerned her alibi, because those OBR forecasts didn't compel her actions. She might have chosen different options; she might have given other reasons, including on budget day itself. Prior to last year's election, Starmer pledged exactly such public influence. "The promise of democracy. The power of the vote. The potential for national renewal."

One year later, yet it's powerlessness that is evident from Reeves's pre-budget speech. The first Labour chancellor in 15 years casts herself to be an apolitical figure at the mercy of factors outside her influence: "Given the circumstances of the persistent challenges with our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She certainly make a choice, only not the kind the Labour party cares to publicize. Starting April 2029 UK workers as well as businesses will be contributing an additional £26bn annually in taxes – and the majority of this will not be spent on better hospitals, new libraries, or enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Instead of going on services, over 50% of this additional revenue will in fact give Reeves cushion for her own fiscal rules. Approximately 25% is allocated to covering the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, a mere 17% of the tax take will fund actual new spending, for example scrapping the two-child cap on child benefit. Removing it "costs" the Treasury only £2.5bn, because it had long been an act of political theatre by George Osborne. A Labour government should have have binned it immediately upon taking office.

The True Audience: The Bond Markets

The Tories, Reform and all of Blue Pravda have been barking about how Reeves conforms to the caricature of Labour chancellors, soaking hard workers to spend on the workshy. Labour backbenchers have been cheering her budget for being balm for their troubled consciences, protecting the most vulnerable. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at investment funds, hedge funds and the others in the bond markets.

The government can make a strong case for itself. The margins provided by the OBR were too small to feel secure, especially given that bond investors charge the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, which lost a prime minister, and exceeding Japan which has way more debt. Coupled with our measures to hold down fuel bills, prescription charges and train fares, Starmer together with Reeves argue their plan enables the central bank to cut its key lending rate.

You can see why those folk with red rosettes might not frame it this way next time they visit #Labourdoorstep. As one independent adviser to Downing Street puts it, Reeves has effectively "weaponised" financial markets as an instrument of control over her own party and the electorate. This is the reason the chancellor can't resign, no matter what promises are broken. It is also why Labour MPs must fall into line and vote that cut billions from social security, just as Starmer promised yesterday.

A Lack of Statecraft , an Unfulfilled Pledge

What is absent here is the notion of strategic governance, of mobilising the Treasury and the Bank to forge a new accommodation with investors. Also absent is intuitive knowledge of voters,