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The charge is a serious one: that Rachel Reeves may have deceived Britons, frightening them into accepting massive additional taxes that would be funneled into increased welfare payments. However exaggerated, this is not usual political bickering; on this occasion, the stakes could be damaging. A week ago, detractors of Reeves and Keir Starmer had been calling their budget "chaotic". Today, it is branded as falsehoods, and Kemi Badenoch demanding the chancellor's resignation.

Such a grave charge demands clear responses, therefore let me provide my view. Has the chancellor lied? Based on the available information, no. She told no blatant falsehoods. But, notwithstanding Starmer's recent comments, that doesn't mean there's no issue here and we can all move along. Reeves did mislead the public about the factors shaping her decisions. Was this all to channel cash to "benefits street", as the Tories claim? Certainly not, as the figures prove it.

A Reputation Takes A Further Hit, But Facts Must Win Out

Reeves has sustained another hit to her standing, however, should facts continue to have anything to do with politics, Badenoch ought to call off her lynch mob. Maybe the stepping down yesterday of OBR head, Richard Hughes, over the leak of its internal documents will satisfy Westminster's thirst for blood.

But the true narrative is far stranger compared to the headlines suggest, and stretches wider and further than the careers of Starmer and the class of '24. Fundamentally, this is a story concerning what degree of influence the public have in the running of our own country. And it should worry everyone.

First, to the Core Details

After the OBR published recently some of the forecasts it provided to Reeves while she wrote the budget, the shock was instant. Not only has the OBR never acted this way before (an "unusual step"), its figures seemingly contradicted Reeves's statements. While leaks from Westminster suggested the grim nature of the budget was going to be, the OBR's own predictions were getting better.

Take the government's most "unbreakable" fiscal rule, that by 2030 daily spending for hospitals, schools, and the rest must be wholly paid for by taxes: at the end of October, the OBR reckoned it would barely be met, albeit only by a tiny margin.

A few days later, Reeves gave a media briefing so unprecedented that it caused morning television to break from its regular schedule. Several weeks prior to the real budget, the country was put on alert: taxes would rise, and the primary cause cited as gloomy numbers provided by the OBR, specifically its conclusion suggesting the UK was less productive, investing more but yielding less.

And lo! It happened. Despite what Telegraph editorials combined with Tory broadcast rounds implied recently, that is basically what happened at the budget, that proved to be significant, harsh, and grim.

The Deceptive Justification

Where Reeves deceived us concerned her alibi, since these OBR forecasts didn't compel her actions. She could have chosen different options; she might have provided alternative explanations, even on budget day itself. Prior to 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 is powerlessness that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half casts herself to be an apolitical figure buffeted by factors 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 certainly make decisions, just not the kind the Labour party cares to publicize. Starting April 2029 British workers and businesses will be paying an additional £26bn a year in taxes – but the majority of this will not be spent on improved healthcare, new libraries, or happier lives. Regardless of what nonsense comes from Nigel Farage, Badenoch and others, it isn't being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Instead of being spent, over 50% of this extra cash will instead provide Reeves a buffer against her own fiscal rules. About 25% is allocated to covering the administration's policy reversals. Reviewing the OBR's calculations and being as generous as possible to Reeves, only 17% of the tax take will go on genuinely additional spending, for example abolishing the two-child cap on child benefit. Its abolition "will cost" the Treasury a mere £2.5bn, as it was always a bit of political theatre from George Osborne. A Labour government should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform and all of right-wing media have been barking about the idea that Reeves conforms to the caricature of Labour chancellors, taxing strivers to fund shirkers. Labour backbenchers have been cheering her budget for being balm to their troubled consciences, protecting the disadvantaged. Each group are completely mistaken: The Chancellor's budget was largely targeted towards asset managers, speculative capital and the others in the bond markets.

The government can make a strong case for itself. The forecasts provided by the OBR were deemed insufficient for comfort, particularly given that lenders charge the UK the highest interest rate among G7 developed nations – higher than France, that recently lost a prime minister, higher than Japan that carries way more debt. Combined with our policies to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget enables the central bank to cut interest rates.

It's understandable that those wearing red rosettes might not couch it in such terms next time they visit #Labourdoorstep. According to a consultant for Downing Street puts it, Reeves has "utilised" the bond market as a tool of discipline over her own party and the electorate. This is why Reeves cannot resign, regardless of which promises she breaks. It's the reason Labour MPs will have to fall into line and support measures to take billions off social security, as Starmer indicated yesterday.

A Lack of Statecraft , a Broken Pledge

What is absent from this is any sense of statecraft, of mobilising the finance ministry and the Bank to reach a new accommodation with investors. Missing too is any innate understanding of voters,