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This allegation is a serious one: that Rachel Reeves has lied to UK citizens, scaring them into accepting massive additional taxes which could be used for higher benefits. While hyperbolic, this is not usual political sparring; this time, the consequences are higher. A week ago, critics of Reeves alongside Keir Starmer had been labeling their budget "chaotic". Today, it's branded as lies, with Kemi Badenoch demanding the chancellor to quit.

Such a grave charge requires clear answers, so let me provide my view. Did the chancellor tell lies? On current evidence, apparently not. She told no major untruths. But, despite Starmer's yesterday's comments, that doesn't mean there is nothing to see and we can all move along. The Chancellor did misinform the public about the factors informing her decisions. Was it to funnel cash towards "welfare recipients", like the Tories claim? No, and the numbers prove this.

A Reputation Takes Another Hit, Yet Truth Must Prevail

Reeves has taken a further hit to her standing, but, should facts still matter in politics, Badenoch ought to stand down her attack dogs. Maybe the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will quench Westminster's appetite for scandal.

Yet the real story is much more unusual than the headlines indicate, and stretches broader and deeper beyond the careers of Starmer and his class of '24. Fundamentally, herein lies a story concerning how much say the public get over the running of the nation. This should concern everyone.

First, on to Brass Tacks

When the OBR published recently some of the forecasts it provided to Reeves while she prepared the red book, the surprise was immediate. Not merely had the OBR not done such a thing before (an "exceptional move"), its numbers apparently contradicted Reeves's statements. Even as leaks from Westminster suggested the grim nature of the budget was going to be, the watchdog's predictions were improving.

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

Several days later, Reeves gave a media briefing so extraordinary it forced breakfast TV 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 pessimistic numbers provided by the OBR, in particular its finding that the UK had become less efficient, investing more but getting less out.

And lo! It came to pass. Despite what Telegraph editorials and Tory broadcast rounds implied over the weekend, this is essentially what transpired during the budget, which was big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us was her alibi, since these OBR forecasts did not compel her actions. She might have made other choices; she might have provided other reasons, even on budget day itself. Prior to the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, yet it is powerlessness that is evident from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half casts herself to be an apolitical figure at the mercy of factors beyond her control: "In the context of the long-term challenges on our productivity … any finance minister of any political stripe would be standing here today, facing the decisions that I face."

She did make decisions, only not the kind the Labour party wishes to publicize. Starting April 2029 UK workers and businesses are set to be contributing an additional £26bn a year in tax – and the majority of this will not go towards spent on better hospitals, public services, or happier lives. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of this additional revenue will in fact give Reeves a buffer against her own fiscal rules. About 25% goes on paying for the administration's policy reversals. Reviewing the watchdog's figures and being as generous as possible towards a Labour chancellor, a mere 17% of the tax take will fund genuinely additional spending, such as abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it had long been an act of political theatre from George Osborne. This administration should have have binned it in its first 100 days.

The Real Target: The Bond Markets

The Tories, Reform along with the entire Blue Pravda have been railing against how Reeves conforms to the caricature of left-wing finance ministers, soaking hard workers to spend on shirkers. Party MPs are cheering her budget as a relief to their troubled consciences, safeguarding the most vulnerable. Both sides could be completely mistaken: The Chancellor's budget was primarily aimed at asset managers, hedge funds and the others in the bond markets.

Downing Street could present a compelling argument in its defence. The forecasts provided by the OBR were deemed too small for comfort, especially considering lenders demand from the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost its leader, higher than Japan that carries far greater debt. Combined with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue this budget enables the central bank to reduce its key lending rate.

It's understandable why those folk with red rosettes may choose not to frame it in such terms when they're on the doorstep. As one independent adviser for Downing Street puts it, Reeves has "utilised" the bond market as an instrument of control over Labour MPs and the voters. This is the reason the chancellor can't resign, no matter what promises she breaks. It is also the reason Labour MPs will have to fall into line and vote that cut billions from social security, as Starmer indicated yesterday.

Missing Statecraft and a Broken Pledge

What is absent from this is the notion of strategic governance, of harnessing the Treasury and the central bank to forge a new accommodation with markets. Also absent is intuitive knowledge of voters,