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This allegation is a serious one: suggesting Rachel Reeves has deceived Britons, frightening them into accepting massive extra taxes which could be used for higher welfare payments. However exaggerated, this is not usual Westminster bickering; on this occasion, the consequences are higher. Just last week, detractors of Reeves and Keir Starmer were calling their budget "chaotic". Now, it's branded as falsehoods, and Kemi Badenoch calling for the chancellor to quit.

This serious accusation demands clear responses, therefore let me provide my assessment. Did the chancellor tell lies? Based on current information, no. She told no whoppers. But, notwithstanding Starmer's yesterday's comments, that doesn't mean there is no issue here and we should move on. Reeves did mislead the public about the factors shaping her choices. Was it to channel cash towards "welfare recipients", like the Tories assert? Certainly not, as the figures demonstrate it.

A Standing Takes A Further Blow, But Facts Must Win Out

Reeves has taken another blow to her standing, but, if facts still have anything to do with politics, Badenoch should stand down her attack dogs. Perhaps the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will satisfy Westminster's appetite for scandal.

Yet the real story is far stranger compared to the headlines suggest, and stretches wider and further than the political futures of Starmer and the class of '24. At its heart, this is an account concerning what degree of influence you and I get in the governance of our own country. This should concern everyone.

Firstly, on to Brass Tacks

When the OBR released last Friday some of the projections it provided to Reeves while she wrote the budget, the shock was instant. Not only had the OBR not done such a thing before (described as an "rare action"), its numbers seemingly contradicted Reeves's statements. While leaks from Westminster suggested the grim nature of the budget would have to be, the watchdog's predictions were improving.

Consider the Treasury's most "unbreakable" fiscal rule, that by 2030 day-to-day spending on hospitals, schools, and other services must be wholly paid for by taxes: in late October, the OBR reckoned it would barely be met, albeit only by a minuscule margin.

A few days later, Reeves held a media briefing so unprecedented it forced morning television to interrupt its regular schedule. Weeks before the actual budget, the nation was warned: taxes would rise, with the primary cause cited as pessimistic numbers from the OBR, in particular its finding suggesting the UK was less productive, investing more but getting less out.

And so! It happened. Notwithstanding what Telegraph editorials and Tory broadcast rounds suggested recently, this is basically what happened at the budget, that proved to be big and painful and bleak.

The Misleading Alibi

Where Reeves misled us concerned her justification, since these OBR forecasts did not compel her actions. She could have chosen other choices; she might have given alternative explanations, even during the statement. Before last year's election, Starmer promised exactly such public influence. "The promise of democracy. The power of the vote. The possibility for national renewal."

A year on, yet it's powerlessness that jumps out from Reeves's breakfast speech. The first Labour chancellor in 15 years casts herself as a technocrat buffeted by forces outside her influence: "Given the circumstances of the persistent challenges on our productivity … any chancellor of any political stripe would be in this position today, confronting the decisions that I face."

She certainly make decisions, only not the kind Labour wishes to publicize. From April 2029 British workers as well as businesses are set to be contributing an additional £26bn annually in tax – and most of that will not go towards funding improved healthcare, new libraries, nor enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it isn't getting splashed on "welfare claimants".

Where the Cash Actually Ends Up

Rather than being spent, more than 50% of the 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 policy reversals. Reviewing the watchdog's figures and being as generous as possible to a Labour chancellor, only 17% of the tax take will go on genuinely additional spending, for example scrapping the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it had long been an act of political theatre from George Osborne. This administration should have have binned it immediately upon taking office.

The Real Target: The Bond Markets

Conservatives, Reform along with the entire Blue Pravda have been barking about the idea that Reeves fits the caricature of left-wing finance ministers, soaking hard workers to fund the workshy. Party MPs are cheering her budget for being balm to their social concerns, protecting the most vulnerable. Each group could be completely mistaken: Reeves's budget was largely targeted towards investment funds, hedge funds and the others in the financial markets.

Downing Street could present a compelling argument in its defence. The margins provided by the OBR were too small to feel secure, especially given that bond investors charge the UK the highest interest rate among G7 developed nations – higher than France, that recently lost a prime minister, and exceeding Japan which has way more debt. Coupled with the measures to cap fuel bills, prescription charges and train fares, Starmer and Reeves argue their plan allows the Bank of England to reduce interest rates.

You can see why those wearing Labour badges might not frame it in such terms when they visit the doorstep. According to a consultant for Downing Street says, Reeves has "weaponised" the bond market as an instrument of discipline over her own party and the electorate. It's the reason the chancellor can't resign, no matter what promises are broken. It is also why Labour MPs will have to knuckle down and support measures that cut billions from social security, as Starmer indicated recently.

Missing Statecraft and an Unfulfilled Promise

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