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The allegation is a serious one: that Rachel Reeves has lied to UK citizens, frightening them to accept billions in additional taxes that could be funneled into increased welfare payments. However exaggerated, this is not typical political bickering; this time, the stakes are higher. Just last week, critics aimed at Reeves and Keir Starmer were calling their budget "disorderly". Now, it's denounced as lies, and Kemi Badenoch calling for the chancellor's resignation.

Such a serious accusation requires straightforward answers, so let me provide my assessment. Has the chancellor lied? On current information, no. There were no whoppers. However, notwithstanding Starmer's yesterday's remarks, that doesn't mean there is nothing to see and we can all move along. The Chancellor did misinform the public regarding the factors informing her decisions. Was it to channel cash to "benefits street", like the Tories claim? Certainly not, as the numbers prove this.

A Standing Sustains Another Hit, Yet Truth Must Prevail

The Chancellor has sustained a further blow to her standing, however, if facts still have anything to do with politics, Badenoch ought to call off her lynch mob. Perhaps the resignation recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy Westminster's thirst for blood.

Yet the real story is far stranger than the headlines indicate, and stretches wider and further than the careers of Starmer and his class of '24. At its heart, herein lies an account about how much say the public have over the running of our own country. This should concern you.

First, on to Brass Tacks

After the OBR published last Friday a portion of the forecasts it provided to Reeves as she prepared the budget, the surprise was instant. Not merely had the OBR not done such a thing before (an "rare action"), its figures seemingly contradicted the chancellor's words. While leaks from Westminster were about how bleak the budget would have to be, the watchdog's forecasts were getting better.

Take the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services would be completely paid for by taxes: in late October, the OBR reckoned this would barely be met, albeit only by a minuscule margin.

A few days later, Reeves held a press conference so extraordinary it forced breakfast TV to break from its regular schedule. Weeks prior to the real budget, the country was put on alert: taxes would rise, and the primary cause cited as pessimistic numbers from the OBR, specifically its conclusion suggesting the UK had become less efficient, putting more in but getting less out.

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

The Misleading Justification

The way in which Reeves misled us concerned her justification, since these OBR forecasts did not force her hand. She could have made other choices; she could have given other reasons, even during the statement. Prior to last year's election, Starmer promised precisely this kind of people power. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, and it is powerlessness that is evident from Reeves's pre-budget speech. The first Labour chancellor in 15 years casts herself as a technocrat at the mercy of factors beyond her control: "In the context of the persistent 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 decisions, just not the kind Labour cares to publicize. From April 2029 UK workers and businesses will be contributing another £26bn annually in tax – and the majority of this will not go towards funding improved healthcare, public services, or enhanced wellbeing. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it is not getting splashed on "benefits street".

Where the Cash Really Goes

Rather than going on services, over 50% of this extra cash will instead give Reeves cushion against her own fiscal rules. About 25% goes on covering the government's own U-turns. Examining the OBR's calculations and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the taxes will go on actual new spending, such as 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 from George Osborne. A Labour government should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform along with the entire Blue Pravda have been railing against how Reeves conforms to the stereotype of Labour chancellors, taxing strivers to spend on shirkers. Labour backbenchers have been applauding her budget for being balm to their social concerns, safeguarding the most vulnerable. Each group could be completely mistaken: Reeves's budget was largely targeted towards investment funds, speculative capital and the others in the bond markets.

Downing Street can make a compelling argument for itself. The margins provided by the OBR were deemed too small for comfort, particularly considering bond investors charge the UK the highest interest rate of all G7 rich countries – higher than France, which lost its leader, and exceeding Japan that carries far greater debt. Combined with our measures to cap fuel bills, prescription charges and train fares, Starmer together with Reeves argue this budget allows the central bank to cut interest rates.

You can see that those wearing red rosettes might not frame it in such terms when they visit the doorstep. According to a consultant for Downing Street says, Reeves has effectively "weaponised" financial markets as an instrument of discipline over Labour MPs and the electorate. This is why the chancellor can't resign, no matter what pledges are broken. It is also the reason Labour MPs must fall into line and vote that cut billions from social security, as Starmer promised recently.

A Lack of Political Vision and a Broken Pledge

What is absent from this is any sense of statecraft, of mobilising the finance ministry and the Bank to forge a fresh understanding with markets. Missing too is innate understanding of voters,