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This accusation represents a grave matter: suggesting Rachel Reeves has lied to UK citizens, frightening them into accepting massive additional taxes that could be spent on higher welfare payments. However hyperbolic, this isn't typical political sparring; on this occasion, the stakes are more serious. A week ago, critics aimed at Reeves alongside Keir Starmer had been calling their budget "a mess". Today, it is denounced as falsehoods, with Kemi Badenoch demanding the chancellor's resignation.

This grave accusation demands clear responses, so let me provide my assessment. Did the chancellor been dishonest? Based on the available evidence, apparently not. She told no blatant falsehoods. However, notwithstanding Starmer's yesterday's comments, it doesn't follow that there's nothing to see and we can all move along. Reeves did mislead the public regarding the considerations shaping her decisions. Was this all to funnel cash towards "benefits street", as the Tories claim? Certainly not, as the figures demonstrate this.

A Reputation Takes Another Blow, Yet Truth Should Win Out

Reeves has taken another blow to her standing, but, should facts still matter in politics, Badenoch ought to call off her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the leak of its internal documents will satisfy SW1's thirst for blood.

But the real story is much more unusual than media reports indicate, extending broader and deeper than the careers of Starmer and the class of '24. At its heart, herein lies a story about what degree of influence you and I get in the governance of our own country. This should concern you.

Firstly, to Brass Tacks

When the OBR released last Friday a portion of the forecasts it shared with Reeves while she wrote the red book, the surprise was instant. Not only had the OBR not done such a thing before (an "unusual step"), its numbers seemingly went against Reeves's statements. While rumors from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were getting better.

Consider the Treasury's so-called "unbreakable" rule, stating by 2030 day-to-day spending on hospitals, schools, and other services would be completely funded by taxes: at the end of October, the OBR calculated this would just about be met, albeit only by a tiny margin.

A few days later, Reeves gave a press conference so unprecedented that it caused morning television to interrupt its usual fare. Several weeks prior to the real budget, the country was put on alert: taxes were going up, with the primary cause being gloomy numbers from the OBR, in particular its finding suggesting the UK had become less productive, putting more in but getting less out.

And lo! It happened. Despite the implications from Telegraph editorials combined with Tory broadcast rounds suggested over the weekend, that is basically what transpired during the budget, that proved to be significant, harsh, and grim.

The Misleading Alibi

Where Reeves deceived us concerned her alibi, since those OBR forecasts didn't force her hand. She might have chosen other choices; she could have given other reasons, even during the statement. Prior to last year's election, Starmer pledged exactly such public influence. "The hope of democracy. The strength of the vote. The potential for national renewal."

A year on, yet it is a lack of agency that jumps out in Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself as a technocrat buffeted by factors outside her influence: "In the context of the persistent challenges on our productivity … any chancellor of any party would be in this position today, facing the choices that I face."

She did make decisions, only not one Labour wishes to broadcast. Starting April 2029 British workers as well as businesses are set to be contributing an additional £26bn a year in tax – but the majority of this will not be funding improved healthcare, new libraries, or enhanced wellbeing. Regardless of what nonsense is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "benefits street".

Where the Cash Really Goes

Instead of being spent, over 50% of the additional revenue will instead give Reeves a buffer against her self-imposed budgetary constraints. About 25% goes on covering the administration's U-turns. Examining the watchdog's figures and being as generous as possible to Reeves, a mere 17% of the taxes will fund genuinely additional spending, for example abolishing the limit on child benefit. Its abolition "will cost" the Treasury only £2.5bn, because it had long been a bit of political theatre by George Osborne. This administration could and should abolished it in its first 100 days.

The True Audience: The Bond Markets

The Tories, Reform along with the entire right-wing media have been railing against the idea that Reeves fits the stereotype of left-wing finance ministers, taxing strivers to fund the workshy. Party MPs have been applauding her budget for being a relief for their troubled consciences, safeguarding the disadvantaged. Both sides are 180-degrees wrong: Reeves's budget was largely targeted towards asset managers, hedge funds and participants within the financial markets.

The government can make a strong case in its defence. The margins provided by the OBR were too small to feel secure, especially considering bond investors charge the UK the highest interest rate of all G7 developed nations – higher than France, which lost a prime minister, and exceeding Japan that carries far greater debt. Combined with the policies to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan allows the Bank of England to reduce interest rates.

You can see why those wearing Labour badges might not frame it this way next time they visit #Labourdoorstep. As one independent adviser for Downing Street says, Reeves has effectively "weaponised" financial markets as an instrument of control over Labour MPs and the electorate. This is the reason Reeves cannot resign, no matter what promises she breaks. It's the reason Labour MPs will have to fall into line and support measures that cut billions from social security, just as Starmer promised yesterday.

Missing Statecraft and a Broken Promise

What is absent from this is the notion of strategic governance, of harnessing the Treasury and the central bank to forge a new accommodation with investors. Also absent is innate understanding of voters,