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The charge carries significant weight: suggesting Rachel Reeves has misled UK citizens, spooking them to accept billions in extra taxes that could be funneled into increased welfare payments. However hyperbolic, this is not typical political sparring; this time, the consequences are higher. A week ago, critics of Reeves and Keir Starmer were calling their budget "a mess". Now, it is branded as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

This serious charge demands straightforward responses, so let me provide my assessment. Did the chancellor tell lies? Based on current information, apparently not. There were no blatant falsehoods. But, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there is nothing to see and we can all move along. Reeves did mislead the public about the factors shaping her decisions. Was it to funnel cash towards "welfare recipients", like the Tories claim? Certainly not, as the numbers prove it.

A Standing Sustains Another Blow, But Facts Should Prevail

Reeves has taken another blow to her standing, however, should facts continue to matter in politics, Badenoch ought to call off her lynch mob. Maybe the resignation recently of OBR head, Richard Hughes, over the unauthorized release of its own documents will satisfy SW1's appetite for scandal.

But the true narrative is much more unusual compared to the headlines suggest, and stretches broader and deeper than the careers of Starmer and his class of '24. Fundamentally, herein lies an account about how much say the public have in the governance of our own country. This should concern you.

First, on to the Core Details

When the OBR released recently a portion of the projections it shared with Reeves while she wrote the budget, the shock was immediate. Not only has the OBR never acted this way before (an "rare action"), its numbers seemingly went against the chancellor's words. Even as rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Take the government's most "unbreakable" rule, that by 2030 day-to-day spending for hospitals, schools, and the rest would be wholly paid for by taxes: in late October, the watchdog reckoned it would barely be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced morning television to interrupt its regular schedule. Several weeks prior to the actual budget, the nation was warned: taxes would rise, and the primary cause being gloomy numbers provided by the OBR, in particular its conclusion that the UK had become less productive, investing more but getting less out.

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

The Deceptive Alibi

Where Reeves deceived us was her justification, since these OBR forecasts did not force her hand. She could have made different options; she could have provided other reasons, including on budget day itself. Before the recent election, Starmer promised precisely this kind of public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it's a lack of agency that is evident from Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself as a technocrat at the mercy of factors beyond her control: "In the context of the persistent challenges on our productivity … any chancellor of any party would be in this position today, confronting the choices that I face."

She certainly make decisions, only not the kind Labour cares to publicize. Starting April 2029 British workers and businesses are set to be contributing another £26bn a year in taxes – and most of that will not be spent on improved healthcare, new libraries, or enhanced wellbeing. Regardless of what bilge is spouted by Nigel Farage, Badenoch and others, it is not getting splashed on "welfare claimants".

Where the Money Really Goes

Instead of going on services, more than 50% of this additional revenue will instead provide Reeves a buffer for her self-imposed budgetary constraints. About 25% goes on paying for the administration's U-turns. Examining the OBR's calculations and being as generous as possible to a Labour chancellor, a mere 17% of the taxes will go on actual new spending, for example abolishing the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, because it had long been an act of political theatre from George Osborne. A Labour government could and should have binned it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform along with all of Blue Pravda have spent days barking about the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to fund the workshy. Labour backbenchers have been cheering her budget as balm for their social concerns, protecting the disadvantaged. Each group could be completely mistaken: Reeves's budget was largely aimed at investment funds, speculative capital and participants within the financial markets.

Downing Street can make a strong case for itself. The forecasts from the OBR were deemed insufficient to feel secure, especially given that lenders demand from the UK the greatest borrowing cost of all G7 rich countries – higher than France, which lost a prime minister, higher than Japan which has way more debt. Combined with our measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget enables the central bank to reduce its key lending rate.

It's understandable that those folk with Labour badges might not couch it this way next time they're on #Labourdoorstep. As a consultant for Downing Street says, Reeves has "utilised" the bond market to act as an instrument of discipline against her own party and the voters. It's why Reeves can't resign, regardless of which pledges are broken. It's why Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer indicated yesterday.

Missing Statecraft and a Broken Promise

What's missing from this is any sense of statecraft, of harnessing the Treasury and the Bank to reach a fresh understanding with investors. Missing too is any intuitive knowledge of voters,