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This allegation is a serious one: that Rachel Reeves has deceived UK citizens, spooking them to accept billions in additional taxes that could be spent on increased benefits. However exaggerated, this isn't usual Westminster bickering; on this occasion, the consequences are higher. A week ago, critics of Reeves alongside Keir Starmer were labeling their budget "uncoordinated". Now, it is denounced as lies, with Kemi Badenoch demanding Reeves to step down.

Such a grave accusation requires clear answers, so let me provide my view. Did the chancellor lied? Based on the available information, no. There were no major untruths. But, despite Starmer's recent comments, it doesn't follow that there is nothing to see and we should move on. Reeves did mislead the public regarding the considerations shaping her choices. Was this all to channel cash towards "benefits street", as the Tories claim? No, and the figures demonstrate this.

A Standing Sustains Another Blow, But Facts Should Win Out

Reeves has sustained a further blow to her standing, however, should facts still have anything to do with politics, Badenoch should call off her lynch mob. Maybe the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, over the leak of its internal documents will satisfy SW1's thirst for blood.

Yet the real story is far stranger compared to media reports suggest, and stretches broader and deeper than the careers of Starmer and his 2024 intake. At its heart, herein lies a story concerning what degree of influence the public have over the running of our own country. This should concern you.

Firstly, to Brass Tacks

When the OBR released last Friday some of the forecasts it shared with Reeves as she prepared the budget, the surprise was immediate. Not only has the OBR not acted this way before (described as an "rare action"), its numbers seemingly contradicted the chancellor's words. Even as leaks from Westminster suggested how bleak the budget was going to be, the OBR's own forecasts were improving.

Consider the Treasury's so-called "unbreakable" rule, stating by 2030 daily spending for hospitals, schools, and other services would be completely paid for by taxes: in late October, the watchdog reckoned this would barely be met, albeit only by a minuscule margin.

Several days later, Reeves gave a media briefing so unprecedented that it caused breakfast TV to break from its usual fare. Weeks before the actual budget, the nation was put on alert: taxes were going up, and the primary cause being gloomy numbers from the OBR, in particular its finding that the UK was less productive, putting more in but getting less out.

And lo! It happened. Despite the implications from Telegraph editorials combined with Tory media appearances suggested recently, this is essentially what happened during the budget, that proved to be big and painful and bleak.

The Misleading Alibi

Where Reeves deceived us concerned her justification, because those OBR forecasts did not compel her actions. She might have chosen different options; she might have given alternative explanations, even during the statement. Before the recent election, Starmer pledged exactly such people power. "The promise of democracy. The strength of the vote. The possibility for national renewal."

A year on, yet it is powerlessness that is evident from Reeves's pre-budget speech. Our first Labour chancellor in 15 years casts herself to be an apolitical figure buffeted by forces outside her influence: "In the context of the persistent challenges on our productivity … any chancellor of any party would be standing here today, facing the decisions that I face."

She certainly make a choice, only not one Labour cares to publicize. Starting April 2029 UK workers as well as businesses will be contributing an additional £26bn a year in tax – and most of that will not be spent on improved healthcare, new libraries, nor happier lives. Regardless of what bilge comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Instead of being spent, over 50% of the additional revenue will in fact give Reeves cushion against her self-imposed fiscal rules. About 25% is allocated to covering the administration's policy reversals. Reviewing the watchdog's figures and giving maximum benefit of the doubt 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 a mere £2.5bn, because it had long been a bit of political theatre by George Osborne. This administration should have abolished it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform and all of Blue Pravda have spent days railing against the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to spend on shirkers. Party MPs have been applauding her budget for being a relief to their social concerns, protecting the most vulnerable. Each group could be completely mistaken: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and participants within the bond markets.

Downing Street could present a strong case for itself. The margins from the OBR were insufficient for comfort, particularly given that lenders charge the UK the highest interest rate among G7 rich countries – higher than France, which lost a prime minister, and exceeding Japan which has way more debt. Coupled with our policies to hold down fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say their plan allows the Bank of England to cut interest rates.

You can see why those wearing Labour badges might not couch it this way next time they visit the doorstep. As one independent adviser for Downing Street says, Reeves has "utilised" financial markets as a tool of control against her own party and the voters. It's why the chancellor cannot resign, no matter what promises she breaks. It is also why Labour MPs must fall into line and vote that cut billions from social security, as Starmer promised yesterday.

Missing 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 fresh understanding with markets. Also absent is any intuitive knowledge of voters,