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The accusation is a serious one: that Rachel Reeves has misled the British public, spooking them to accept massive additional taxes which could be spent on higher benefits. However hyperbolic, this is not typical political bickering; on this occasion, the stakes could be damaging. Just last week, detractors of Reeves and Keir Starmer were calling their budget "a shambles". Today, it's branded as lies, with Kemi Badenoch demanding the chancellor's resignation.

This grave accusation demands straightforward answers, so here is my assessment. Has the chancellor lied? Based on the available evidence, apparently not. There were no blatant falsehoods. But, notwithstanding Starmer's yesterday's comments, it doesn't follow that there is nothing to see and we should move on. The Chancellor did misinform the public regarding the considerations informing her decisions. Was this all to channel cash towards "welfare recipients", like the Tories assert? Certainly not, as the figures demonstrate this.

A Reputation Takes Another Blow, But Facts Should Win Out

Reeves has taken another blow to her standing, but, should facts still have anything to do with politics, Badenoch should stand down her lynch mob. Perhaps the resignation recently of OBR head, Richard Hughes, due to the leak of its internal documents will quench Westminster's thirst for blood.

Yet the real story is much more unusual than the headlines indicate, extending broader and deeper than the political futures of Starmer and his class of '24. Fundamentally, this is an account about how much say the public have in the running of the nation. This should should worry everyone.

First, to the Core Details

When the OBR released last Friday a portion of the projections it provided to Reeves while she prepared the red book, the shock was instant. Not only has the OBR never acted this way before (an "rare action"), its figures apparently contradicted Reeves's statements. While rumors from Westminster suggested how bleak the budget was going to be, the watchdog's predictions were improving.

Take the Treasury's most "iron-clad" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services must be completely funded by taxes: at the end of October, the watchdog reckoned it would just about be met, albeit by a tiny margin.

Several days later, Reeves held a media briefing so extraordinary it forced morning television to interrupt its usual fare. Several weeks before the real budget, the nation was put on alert: taxes were going up, and the primary cause being gloomy numbers provided by the OBR, in particular its finding suggesting the UK had become less productive, investing more but yielding less.

And so! It happened. Notwithstanding what Telegraph editorials combined with Tory media appearances implied recently, this is basically what transpired at the budget, which was significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves misled us was her alibi, because these OBR forecasts didn't compel her actions. She could have chosen different options; she could have provided other reasons, even on budget day itself. Before the recent election, Starmer pledged exactly such public influence. "The hope of democracy. The strength of the vote. The possibility for national renewal."

A year on, yet it's powerlessness that jumps out in Reeves's pre-budget speech. The first Labour chancellor for a decade and a half portrays herself to be a technocrat at the mercy of forces outside her influence: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She did make decisions, just not the kind Labour cares to publicize. Starting April 2029 British workers and businesses are set to be paying another £26bn a year in taxes – and most of that will not be spent on better hospitals, new libraries, nor happier lives. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it isn't getting splashed on "benefits street".

Where the Money Really Goes

Instead of going on services, over 50% of this extra cash will instead provide Reeves a buffer for her own fiscal rules. Approximately 25% goes on paying for the government's own U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to Reeves, a mere 17% of the tax take will fund genuinely additional spending, such as scrapping the two-child cap on child benefit. Its abolition "costs" the Treasury only £2.5bn, because it had long been an act of political theatre by George Osborne. This administration could and should abolished it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform and all of right-wing media have spent days barking about how Reeves fits the stereotype of Labour chancellors, taxing strivers to spend on shirkers. Labour backbenchers are applauding her budget as a relief for their social concerns, protecting the disadvantaged. Both sides could be completely mistaken: Reeves's budget was primarily aimed at investment funds, speculative capital and participants within the bond markets.

Downing Street could present a compelling argument in its defence. The forecasts from the OBR were deemed too small for comfort, especially considering bond investors charge the UK the greatest borrowing cost among G7 rich countries – exceeding that of France, that recently lost a prime minister, higher than Japan which has far greater debt. Coupled with the measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue their plan allows the central bank to cut interest rates.

It's understandable why those wearing red rosettes may choose not to frame it this way when they're on the doorstep. As a consultant for Downing Street says, Reeves has effectively "weaponised" the bond market as an instrument of control over her own party and the voters. This is why the chancellor cannot resign, no matter what promises are broken. It's the reason Labour MPs will have to knuckle down and support measures to take billions off social security, just as Starmer indicated recently.

A Lack of Statecraft and a Broken Promise

What is absent here is the notion of statecraft, of harnessing the Treasury and the central bank to reach a new accommodation with markets. Missing too is innate understanding of voters,