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The allegation is a serious one: that Rachel Reeves has deceived UK citizens, spooking them to accept massive additional taxes which would be funneled into increased benefits. However exaggerated, this is not typical political bickering; on this occasion, the stakes could be damaging. A week ago, critics aimed at Reeves and Keir Starmer had been labeling their budget "a shambles". Today, it's branded as falsehoods, and Kemi Badenoch calling for Reeves to step down.

This serious accusation requires straightforward answers, so let me provide my assessment. Has the chancellor tell lies? On the available evidence, apparently not. There were no whoppers. However, despite Starmer's yesterday's remarks, that doesn't mean there's nothing to see and we should move on. Reeves did mislead the public about the factors informing her decisions. Was this all to channel cash towards "benefits street", as the Tories claim? No, as the figures demonstrate this.

A Standing Takes Another Hit, But Facts Must Prevail

The Chancellor has sustained a further hit to her standing, but, should facts still have anything to do with politics, Badenoch ought to call off her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its internal documents will quench Westminster's appetite for scandal.

Yet the real story is much more unusual compared to the headlines indicate, extending wider and further than the careers of Starmer and the 2024 intake. Fundamentally, this is an account concerning what degree of influence you and I have over the running of our own country. This should concern everyone.

First, to Brass Tacks

After the OBR released recently some of the forecasts it provided to Reeves as she prepared the budget, the surprise was immediate. Not merely had the OBR never acted this way before (described as an "exceptional move"), its numbers seemingly contradicted Reeves's statements. While leaks from Westminster suggested how bleak the budget would have to be, the watchdog's forecasts were getting better.

Take the Treasury's so-called "unbreakable" rule, that by 2030 day-to-day spending for hospitals, schools, and other services would be wholly funded by taxes: in late October, the watchdog calculated this would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a press conference so unprecedented it forced morning television to interrupt its regular schedule. Weeks before the actual budget, the nation was put on alert: taxes were going up, and the main reason being gloomy numbers provided by the OBR, in particular its conclusion that the UK was less productive, investing more but getting less out.

And lo! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested over the weekend, that is essentially what happened during the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us concerned her justification, since these OBR forecasts didn't compel her actions. She might have made other choices; she might have provided other reasons, even during the statement. Prior to the recent election, Starmer promised exactly such public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is a lack of agency that is evident in Reeves's pre-budget speech. The first Labour chancellor in 15 years portrays herself to be an apolitical figure at the mercy of factors beyond her control: "Given the circumstances of the long-term challenges with our productivity … any chancellor of any party would be in this position today, facing the decisions that I face."

She certainly make a choice, only not the kind Labour wishes to publicize. From April 2029 UK workers as well as businesses are set to be paying an additional £26bn annually in tax – but the majority of this will not be spent on improved healthcare, new libraries, nor enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Really Goes

Instead of going on services, more than 50% of this extra cash will instead provide Reeves cushion for her own fiscal rules. About 25% goes on paying for the administration's policy reversals. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, a mere 17% of the taxes will go on actual new spending, for example scrapping the limit on child benefit. Removing it "will cost" the Treasury only £2.5bn, because it was always a bit of political theatre by George Osborne. This administration could and should abolished it in its first 100 days.

The Real Target: The Bond Markets

The Tories, Reform along with the entire right-wing media have been railing against the idea that Reeves conforms to the stereotype of Labour chancellors, taxing strivers to fund shirkers. Party MPs are cheering her budget for being a relief for their troubled consciences, safeguarding the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was primarily targeted towards asset managers, speculative capital and the others in the bond markets.

Downing Street can make a compelling argument in its defence. The margins provided by the OBR were deemed too small to feel secure, especially given that bond investors charge the UK the greatest borrowing cost among G7 developed nations – higher than France, which lost a prime minister, higher than Japan which has far greater debt. Coupled with our policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves argue their plan enables the central bank to cut interest rates.

You can see that those folk with red rosettes may choose not to couch it in such terms next time they're on #Labourdoorstep. According to one independent adviser for Downing Street puts it, Reeves has effectively "utilised" financial markets to act as an instrument of control over her own party and the voters. This is the reason Reeves can't resign, no matter what pledges she breaks. It is also the reason Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer promised recently.

A Lack of Statecraft and a Broken Pledge

What's missing from this is the notion of statecraft, of mobilising the finance ministry and the Bank to reach a new accommodation with investors. Also absent is innate understanding of voters,