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The charge is a serious one: that Rachel Reeves may have lied to Britons, frightening them to accept billions in additional taxes which could be used for increased welfare payments. However hyperbolic, this is not typical Westminster bickering; this time, the consequences are higher. A week ago, critics of Reeves and Keir Starmer were calling their budget "a shambles". Today, it is branded as lies, with Kemi Badenoch calling for the chancellor's resignation.

This grave charge requires clear answers, therefore let me provide my view. Did the chancellor tell lies? Based on current information, no. She told no major untruths. However, despite Starmer's yesterday's remarks, that doesn't mean there's no issue here and we can all move along. Reeves did mislead the public about the considerations shaping her choices. Was this all to funnel cash towards "welfare recipients", as the Tories claim? Certainly not, and the figures demonstrate it.

A Reputation Takes Another Blow, Yet Truth Should Win Out

Reeves has taken another hit to her standing, but, if facts still matter in politics, Badenoch should stand down her lynch mob. Perhaps the resignation yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's thirst for blood.

Yet the true narrative is far stranger compared to the headlines indicate, and stretches broader and deeper beyond the careers of Starmer and his 2024 intake. At its heart, herein lies a story concerning what degree of influence you and I have in the running of our own country. This should should worry everyone.

Firstly, on to Brass Tacks

When the OBR released recently a portion of the projections it provided to Reeves while she wrote the red book, the shock was immediate. Not merely had the OBR never acted this way before (an "rare action"), its figures apparently went against the chancellor's words. Even as leaks from Westminster were about how bleak the budget was going to be, the OBR's own predictions were getting better.

Take the Treasury's most "unbreakable" fiscal rule, that by 2030 daily spending on hospitals, schools, and other services must be completely paid for by taxes: in late October, the OBR reckoned it would just about be met, albeit only by a minuscule margin.

A few days later, Reeves gave a media briefing so extraordinary it forced breakfast TV to interrupt its usual fare. Several weeks before the actual budget, the nation was put on alert: taxes would rise, with the primary cause being gloomy numbers provided by the OBR, in particular its finding suggesting the UK was less efficient, putting more in but getting less out.

And lo! It happened. Notwithstanding the implications from Telegraph editorials and Tory broadcast rounds suggested recently, this is basically what happened during the budget, which was significant, harsh, and grim.

The Deceptive Justification

The way in which Reeves misled us concerned her alibi, since these OBR forecasts didn't force her hand. She might have made other choices; she might have provided alternative explanations, including during the statement. Prior to the recent election, Starmer pledged precisely this kind of people power. "The promise of democracy. The power of the vote. The potential for national renewal."

One year later, and it's a lack of agency that jumps out from Reeves's breakfast speech. Our first Labour chancellor for a decade and a half portrays herself as a technocrat buffeted by forces outside her influence: "In the context of the long-term challenges with our productivity … any chancellor of any party would be in this position today, confronting the decisions that I face."

She did make a choice, just not one the Labour party wishes to broadcast. From April 2029 UK workers as well as businesses will be paying another £26bn a year in taxes – but the majority of this will not go towards spent on better hospitals, new libraries, or happier lives. Whatever nonsense is spouted by Nigel Farage, Badenoch and others, it is not being lavished upon "welfare claimants".

Where the Money Actually Ends Up

Instead of going on services, more than 50% of this extra cash will in fact give Reeves a buffer for her self-imposed budgetary constraints. About 25% is allocated to paying for the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt to a Labour chancellor, a mere 17% of the tax take will fund genuinely additional spending, for example scrapping the limit on child benefit. Its abolition "costs" the Treasury a mere £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

The Tories, Reform along with all of right-wing media have been barking about the idea that Reeves conforms to the stereotype of left-wing finance ministers, taxing hard workers to spend on shirkers. Labour backbenchers have been applauding her budget as balm to their social concerns, safeguarding the disadvantaged. Each group are 180-degrees wrong: The Chancellor's budget was largely aimed at asset managers, speculative capital and the others in the financial markets.

The government can make a strong case in its defence. The margins provided by the OBR were deemed insufficient to feel secure, especially considering lenders charge the UK the greatest borrowing cost of all G7 rich countries – exceeding that of France, that recently lost its leader, and exceeding Japan which has far greater debt. Coupled with our measures to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves can say this budget enables the Bank of England to reduce interest rates.

You can see that those folk with red rosettes might not couch it in such terms next time they're on #Labourdoorstep. As one independent adviser to Downing Street says, Reeves has "utilised" financial markets as an instrument of control over her own party and the voters. This is why Reeves cannot resign, no matter what promises are broken. It's why Labour MPs will have to knuckle down and support measures to take billions off social security, as Starmer indicated yesterday.

A Lack of Statecraft , an Unfulfilled Pledge

What's missing from this is any sense of statecraft, of mobilising the Treasury and the central bank to reach a fresh understanding with markets. Missing too is any innate understanding of voters,