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This allegation represents a grave matter: that Rachel Reeves has misled Britons, spooking them into accepting billions in additional taxes that could be used for increased benefits. While exaggerated, this isn't typical political sparring; this time, the stakes could be damaging. A week ago, detractors aimed at Reeves and Keir Starmer were labeling their budget "a shambles". Today, it's denounced as falsehoods, with Kemi Badenoch calling for the chancellor's resignation.

Such a serious charge requires straightforward responses, so here is my view. Has the chancellor tell lies? On the available information, apparently not. There were no major untruths. However, despite Starmer's yesterday's comments, it doesn't follow that there is no issue here and we can all move along. The Chancellor did mislead the public regarding the considerations shaping her choices. Was it to funnel cash to "benefits street", like the Tories assert? Certainly not, as the figures prove this.

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

The Chancellor has taken a further blow to her standing, but, if facts continue to 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, due to the leak of its internal documents will quench Westminster's appetite for scandal.

But the real story is much more unusual than media reports suggest, extending broader and deeper than the political futures of Starmer and the 2024 intake. At its heart, this is an account about how much say the public have over the governance of the nation. And it should worry you.

Firstly, on to Brass Tacks

After the OBR published last Friday some of the projections it provided to Reeves as she wrote the red book, the shock was instant. Not merely had the OBR never acted this way before (described as an "rare action"), its figures apparently went against the chancellor's words. While rumors from Westminster suggested the grim nature of the budget would have to be, the watchdog's forecasts were getting better.

Consider the Treasury's most "unbreakable" fiscal rule, stating by 2030 day-to-day spending for hospitals, schools, and the rest would be completely paid for by taxes: at the end of October, the OBR calculated this would just about be met, albeit by a minuscule margin.

Several days later, Reeves held a press conference so extraordinary that it caused breakfast TV to break from its regular schedule. Several weeks before the real budget, the country was put on alert: taxes were going up, and the primary cause cited as gloomy numbers provided by the OBR, in particular its finding that the UK had become less efficient, investing more but getting less out.

And lo! It came to pass. Despite the implications from Telegraph editorials and Tory media appearances implied over the weekend, this is essentially what happened during the budget, which was significant, harsh, and grim.

The Misleading Justification

Where Reeves deceived us concerned her justification, because these OBR forecasts didn't compel her actions. She might have made other choices; she could have given other reasons, even during the statement. Before last year's election, Starmer promised precisely this kind of people power. "The hope of democracy. The strength of the vote. The possibility for national renewal."

One year later, and it is a lack of agency that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself to be a technocrat buffeted by factors beyond her control: "Given the circumstances of the long-term challenges on our productivity … any finance minister of any party would be in this position today, facing the decisions that I face."

She certainly make a choice, only not one Labour wishes to publicize. From April 2029 UK workers and businesses will be contributing an additional £26bn annually in tax – and the majority of this will not be spent on better hospitals, public services, nor happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and their allies, it is not being lavished upon "welfare claimants".

Where the Money Really Goes

Rather than being spent, more than 50% of the extra cash will instead provide Reeves cushion against her own fiscal rules. Approximately 25% is allocated to covering the administration's U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt to Reeves, a mere 17% of the taxes will fund genuinely additional spending, such as scrapping the two-child cap on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always a bit of political theatre by George Osborne. This administration could and should have binned it immediately upon taking office.

The Real Target: Financial Institutions

The Tories, Reform and all of Blue Pravda have spent days 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 as balm for their social concerns, safeguarding the most vulnerable. Both sides could be 180-degrees wrong: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and the others in the financial markets.

Downing Street could present a strong case for itself. The margins provided by the OBR were too small to feel secure, particularly given that bond investors charge the UK the highest interest rate of all G7 rich countries – exceeding that of France, which lost its leader, and exceeding Japan which has way more debt. Coupled with the policies to cap fuel bills, prescription charges and train fares, Starmer and Reeves can say their plan enables the central bank to reduce its key lending rate.

You can see why those folk with red rosettes might not frame it this way when they visit #Labourdoorstep. As one independent adviser to Downing Street puts it, Reeves has "weaponised" the bond market to act as an instrument of discipline over Labour MPs and the voters. It's the reason Reeves can't resign, regardless of which promises are broken. It is also the reason Labour MPs will have to knuckle down and support measures to take billions off social security, just as Starmer promised yesterday.

Missing Political Vision , an Unfulfilled Promise

What is absent here is any sense of statecraft, of harnessing the Treasury and the Bank to forge a new accommodation with markets. Also absent is any intuitive knowledge of voters,