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The allegation carries significant weight: that Rachel Reeves may have lied to Britons, spooking them into accepting massive extra taxes which could be spent on increased benefits. While exaggerated, this isn't typical Westminster sparring; this time, the consequences could be damaging. A week ago, detractors of Reeves alongside Keir Starmer had been calling their budget "uncoordinated". Now, it is denounced as lies, and Kemi Badenoch demanding Reeves to step down.

This grave accusation requires clear answers, so here is my assessment. Has the chancellor tell lies? Based on current information, apparently not. She told no blatant falsehoods. But, notwithstanding Starmer's yesterday's comments, that doesn't mean there is no issue here and we can all move along. Reeves did misinform the public about the factors shaping her decisions. Was this all to funnel cash towards "benefits street", like the Tories assert? Certainly not, as the figures demonstrate it.

A Reputation Takes Another Blow, Yet Truth Should Win Out

Reeves has taken a further blow to her reputation, however, if facts continue to have anything to do with politics, Badenoch should stand down her attack dogs. Maybe the stepping down recently of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its own documents will satisfy SW1's thirst for blood.

Yet the true narrative is far stranger than the headlines indicate, and stretches broader and deeper than the political futures of Starmer and his 2024 intake. At its heart, this is an account concerning what degree of influence the public get in the governance of the nation. This should concern you.

First, on to the Core Details

After the OBR published recently some of the projections it provided to Reeves as she prepared the red book, the shock was instant. Not merely had the OBR never acted this way before (an "exceptional move"), its figures seemingly contradicted the chancellor's words. Even as leaks from Westminster suggested how bleak the budget was going to be, the watchdog's forecasts were improving.

Take the Treasury's so-called "unbreakable" fiscal rule, that by 2030 daily spending on hospitals, schools, and the rest would be wholly paid for by taxes: at the end of October, the watchdog calculated it would just about be met, albeit by a minuscule margin.

A few days later, Reeves gave a press conference so unprecedented it forced morning television to break from its regular schedule. Several weeks before the actual budget, the nation was warned: taxes were going up, with the main reason being pessimistic numbers from the OBR, in particular its finding suggesting the UK had become less productive, putting more in but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds implied over the weekend, that is essentially what transpired at the budget, that proved to be big and painful and bleak.

The Misleading Alibi

The way in which Reeves deceived us concerned her justification, since these OBR forecasts didn't compel her actions. She could have made different options; she could have provided alternative explanations, even on budget day itself. Before the recent election, Starmer pledged precisely this kind of public influence. "The hope of democracy. The power of the vote. The possibility for national renewal."

One year later, yet it is powerlessness that jumps out from Reeves's pre-budget speech. The first Labour chancellor in 15 years casts herself as an apolitical figure at the mercy of forces beyond her control: "In the context of the long-term challenges on our productivity … any finance minister of any political stripe would be in this position today, facing the choices that I face."

She did make decisions, just not the kind the Labour party cares to broadcast. Starting April 2029 British workers as well as businesses will be contributing an additional £26bn annually in taxes – and most of that will not be spent on improved healthcare, public services, nor enhanced wellbeing. Regardless of what nonsense comes from Nigel Farage, Badenoch and their allies, it isn't getting splashed on "benefits street".

Where the Cash Really Goes

Rather than going on services, more than 50% of this extra cash will instead provide Reeves cushion against her self-imposed fiscal rules. About 25% goes on covering the government's own policy reversals. Reviewing the watchdog's figures and being as generous as possible to Reeves, only 17% of the taxes will fund actual new spending, such as abolishing the limit on child benefit. Removing it "will cost" the Treasury a mere £2.5bn, as it had long been a bit of political theatre from George Osborne. A Labour government should have have binned it in its first 100 days.

The Real Target: Financial Institutions

The Tories, Reform and the entire Blue Pravda have spent days barking about how Reeves conforms to the caricature of left-wing finance ministers, soaking strivers to spend on shirkers. Labour backbenchers have been cheering her budget as a relief for their troubled consciences, protecting the most vulnerable. Both sides are completely mistaken: The Chancellor's budget was largely targeted towards asset managers, speculative capital and the others in the financial markets.

Downing Street can make a compelling argument in its defence. The margins provided by the OBR were too small to feel secure, particularly considering bond investors charge the UK the highest interest rate among G7 developed nations – exceeding that of France, that recently lost its leader, and exceeding Japan which has way more debt. Coupled with the measures to hold down fuel bills, prescription charges and train fares, Starmer and Reeves can say this budget allows the central bank to cut interest rates.

You can see why those folk with Labour badges might not frame it in such terms when they visit #Labourdoorstep. According to one independent adviser for Downing Street puts it, Reeves has effectively "weaponised" financial markets to act as a tool of discipline against her own party and the electorate. This is the reason Reeves cannot resign, regardless of which pledges are broken. It's the reason Labour MPs will have to fall into line and support measures to take billions off social security, just as Starmer promised recently.

Missing Political Vision , an Unfulfilled Promise

What's missing from this is any sense of statecraft, of harnessing the Treasury and the Bank to forge a new accommodation with investors. Missing too is innate understanding of voters,