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This charge is a serious one: suggesting Rachel Reeves has misled UK citizens, scaring them to accept billions in extra taxes that would be funneled into higher welfare payments. However exaggerated, this isn't typical Westminster sparring; this time, the stakes are more serious. Just last week, detractors of Reeves and Keir Starmer had been labeling their budget "a shambles". Today, it's branded as falsehoods, and Kemi Badenoch demanding Reeves to step down.

This serious charge requires clear answers, so here is my view. Did the chancellor lied? On the available information, apparently not. She told no blatant falsehoods. But, notwithstanding Starmer's recent remarks, that doesn't mean there's nothing to see and we can all move along. The Chancellor did mislead the public about the factors informing her decisions. Was this all to channel cash to "welfare recipients", like the Tories claim? No, as the numbers prove this.

A Reputation Takes A Further Hit, Yet Truth Should Prevail

The Chancellor has taken another blow to her reputation, however, should facts continue to have anything to do with politics, Badenoch should call off her attack dogs. Perhaps 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.

But the true narrative is much more unusual than the headlines indicate, and stretches wider and further than the careers of Starmer and his 2024 intake. Fundamentally, this is an account about what degree of influence the public have over the governance of the nation. This should should worry everyone.

First, on to Brass Tacks

When the OBR released recently a portion of the projections it shared with Reeves while she wrote the budget, the shock was immediate. Not merely had the OBR not done such a thing before (described as an "exceptional move"), its figures apparently went against the chancellor's words. While rumors from Westminster were about how bleak the budget was going to be, the watchdog's forecasts were improving.

Consider the Treasury's so-called "iron-clad" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services must be completely paid for by taxes: at the end of October, the OBR reckoned this would barely be met, albeit by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced morning television to break from its usual fare. Weeks before the actual budget, the nation was put on alert: taxes were going up, with the main reason being pessimistic numbers provided by the OBR, specifically its finding that the UK was less productive, putting more in but getting less out.

And lo! It happened. Notwithstanding what Telegraph editorials and Tory media appearances suggested recently, this is basically what transpired at the budget, that proved to be big and painful and bleak.

The Misleading Justification

The way in which Reeves deceived us was her justification, because those OBR forecasts did not compel her actions. She could have made other choices; she might have given alternative explanations, including during the statement. Prior to the recent election, Starmer promised precisely this kind of people power. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that jumps out in Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure buffeted by forces outside her influence: "Given the circumstances of the persistent challenges with our productivity … any finance minister of any party would be standing here today, confronting the choices that I face."

She certainly make decisions, just not one Labour wishes to publicize. From April 2029 British workers as well as businesses will be contributing an additional £26bn annually in tax – and the majority of this will not go towards funding better hospitals, new libraries, or enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Money Actually Ends Up

Rather than going on services, over 50% of this extra cash will in fact provide Reeves a buffer against her self-imposed fiscal rules. About 25% is allocated to covering the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible towards Reeves, only 17% of the taxes will fund actual new spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury only £2.5bn, as it was always a bit of theatrical cruelty by George Osborne. A Labour government should have have binned it immediately upon taking office.

The True Audience: The Bond Markets

Conservatives, Reform along with all of right-wing media have spent days barking about the idea that Reeves fits the stereotype of Labour chancellors, soaking hard workers to fund the workshy. Party MPs are cheering her budget for being balm to their social concerns, protecting the disadvantaged. Each group are 180-degrees wrong: Reeves's budget was primarily targeted towards investment funds, hedge funds and the others in the bond markets.

The government can make a strong case for itself. The forecasts from the OBR were insufficient to feel secure, particularly considering bond investors demand from the UK the highest interest rate among G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan enables the central bank to reduce interest rates.

You can see why those folk with Labour badges may choose not to frame it this way when they visit the doorstep. According to a consultant for Downing Street says, Reeves has "weaponised" financial markets to act as a tool of control against her own party and the electorate. It's why Reeves cannot resign, no matter what pledges she breaks. It is also the reason Labour MPs must knuckle down and support measures to take billions off social security, just as Starmer promised recently.

A Lack of Statecraft and an Unfulfilled Pledge

What is absent here is the notion of statecraft, of mobilising the Treasury and the central bank to reach a fresh understanding with investors. Missing too is any innate understanding of voters,