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The allegation represents a grave matter: that Rachel Reeves may have misled Britons, scaring them to accept massive additional taxes which would be spent on increased welfare payments. While hyperbolic, this is not typical Westminster sparring; on this occasion, the stakes are higher. Just last week, critics of Reeves and Keir Starmer were calling their budget "a shambles". Today, it's branded as falsehoods, with Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge requires clear responses, so let me provide my view. Has the chancellor lied? On current information, no. She told no major untruths. But, notwithstanding Starmer's yesterday's remarks, that doesn't mean there is nothing to see and we can all move along. The Chancellor did mislead the public about the considerations shaping her choices. Was this all to channel cash to "welfare recipients", like the Tories claim? No, and the figures demonstrate it.

A Reputation Takes A Further Hit, Yet Truth Should Win Out

Reeves has sustained a further blow to her reputation, however, should facts continue to have anything to do with politics, Badenoch ought to call off her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the unauthorized release of its internal documents will quench SW1's thirst for blood.

Yet the true narrative is far stranger than the headlines indicate, and stretches broader and deeper beyond the political futures of Starmer and the 2024 intake. Fundamentally, herein lies an account concerning what degree of influence the public have over the running of the nation. And it concern you.

Firstly, to the Core Details

When the OBR published recently some of the forecasts it provided to Reeves while she prepared the budget, the surprise was instant. Not only has the OBR not done such a thing before (an "unusual step"), its numbers seemingly went against the chancellor's words. Even as rumors from Westminster suggested the grim nature of the budget would have to be, the watchdog's predictions were getting better.

Consider the government's most "iron-clad" rule, that by 2030 daily spending on hospitals, schools, and the rest must be completely funded by taxes: in late October, the watchdog calculated it would barely be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so extraordinary that it caused breakfast TV to break from its usual fare. Weeks before the actual budget, the country was warned: taxes were going up, with the main reason cited as gloomy numbers from the OBR, in particular its conclusion suggesting the UK had become less efficient, investing more but yielding less.

And lo! It happened. Despite the implications from Telegraph editorials and Tory media appearances implied over the weekend, that is basically what happened at the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves misled us concerned her alibi, since those OBR forecasts didn't compel her actions. She might have made different options; she might have given alternative explanations, including on budget day itself. Prior to last year's election, Starmer promised exactly such people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

A year on, and it's powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself as an apolitical figure buffeted by factors outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any political stripe would be standing here today, facing the choices that I face."

She did make a choice, only not the kind Labour cares to publicize. Starting April 2029 British workers as well as businesses are set to be paying another £26bn a year in taxes – but most of that will not be funding improved healthcare, public services, nor enhanced wellbeing. Whatever bilge is spouted by Nigel Farage, Badenoch and their allies, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Rather than being spent, over 50% of the extra cash will in fact give Reeves a buffer against her own fiscal rules. About 25% is allocated to paying for the government's own policy reversals. Examining the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the tax take will fund actual new spending, for example scrapping the two-child cap on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it had long been an act of theatrical cruelty from George Osborne. A Labour government could and should have binned it in its first 100 days.

The True Audience: Financial Institutions

Conservatives, Reform and all of Blue Pravda have spent days barking about the idea that Reeves conforms to the stereotype of Labour chancellors, taxing strivers to fund shirkers. Labour backbenchers have been cheering her budget as a relief for their social concerns, protecting the most vulnerable. Both sides could be 180-degrees wrong: Reeves's budget was primarily aimed at asset managers, speculative capital and the others in the financial markets.

The government could present a strong case for itself. The forecasts provided by the OBR were deemed too small for comfort, particularly considering lenders demand from the UK the highest interest rate of all G7 rich countries – exceeding that of France, which lost its leader, and exceeding Japan that carries way more 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 cut its key lending rate.

It's understandable that those wearing red rosettes may choose not to couch it this way when they visit #Labourdoorstep. According to one independent adviser to Downing Street says, Reeves has "utilised" financial markets to act as a tool of control over her own party and the voters. This is why the chancellor cannot resign, no matter what pledges she breaks. It is also the reason Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer indicated yesterday.

Missing Political Vision and a Broken Pledge

What is absent from this is the notion of statecraft, of harnessing the Treasury and the central bank to reach a fresh understanding with markets. Missing too is any innate understanding of voters,