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This allegation is a serious one: that Rachel Reeves has deceived Britons, scaring them to accept massive additional taxes that would be used for increased benefits. However exaggerated, this is not typical political bickering; this time, the consequences are higher. Just last week, critics aimed at Reeves alongside Keir Starmer had been calling their budget "chaotic". Today, it's denounced as lies, with Kemi Badenoch calling for the chancellor's resignation.

Such a grave accusation requires straightforward answers, so let me provide my assessment. Did the chancellor lied? Based on current evidence, apparently not. There were no blatant falsehoods. But, despite Starmer's recent comments, it doesn't follow that there is no issue here and we can all move along. Reeves did mislead the public about the considerations informing her choices. Was this all to funnel cash to "benefits street", as the Tories claim? Certainly not, and the numbers demonstrate it.

A Standing Sustains Another Hit, Yet Truth Must Win Out

The Chancellor has sustained a further hit to her standing, but, should facts continue to matter in politics, Badenoch ought to stand down her attack dogs. Maybe the resignation recently of OBR head, Richard Hughes, over the leak of its internal documents will quench SW1's appetite for scandal.

But the real story is much more unusual than the headlines indicate, and stretches broader and deeper beyond the careers of Starmer and the class of '24. Fundamentally, this is a story about how much say the public get in the governance of our own country. And it should worry everyone.

Firstly, to Brass Tacks

After the OBR released last Friday a portion of the projections it provided to Reeves while she wrote the red book, the shock was immediate. Not only has the OBR never done such a thing before (described as an "exceptional move"), its figures seemingly went against Reeves's statements. While rumors from Westminster were about the grim nature of the budget would have to be, the watchdog's forecasts were getting better.

Consider the Treasury's most "iron-clad" fiscal rule, that by 2030 day-to-day spending for hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the watchdog calculated it would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a media briefing so unprecedented that it caused breakfast TV to interrupt its regular schedule. Several weeks before the actual budget, the country was warned: taxes were going up, and the main reason cited as gloomy numbers provided by the OBR, in particular its finding suggesting the UK was less efficient, investing more but yielding less.

And lo! It came to pass. Notwithstanding the implications from Telegraph editorials combined with Tory broadcast rounds suggested recently, this is essentially 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 made different options; she might have given other reasons, even on budget day itself. Prior to last year's election, Starmer promised precisely this kind of public influence. "The promise of democracy. The strength of the vote. The potential for national renewal."

One year later, yet it's powerlessness that is evident in Reeves's pre-budget speech. Our first Labour chancellor in 15 years portrays herself as an apolitical figure buffeted by factors beyond her control: "Given the circumstances of the long-term challenges on our productivity … any chancellor of any party would be standing here today, facing the choices that I face."

She certainly make a choice, just not the kind Labour cares to publicize. From April 2029 British workers and businesses will be paying another £26bn annually in taxes – but the majority of this will not go towards funding better hospitals, public services, or enhanced wellbeing. Whatever bilge comes from Nigel Farage, Badenoch and others, it is not getting splashed on "benefits street".

Where the Cash Actually Ends Up

Instead of being spent, over 50% of the extra cash will in fact give Reeves a buffer against her self-imposed budgetary constraints. Approximately 25% goes on paying for the government's own U-turns. Reviewing the OBR's calculations and being as generous as possible to Reeves, a mere 17% of the tax take will fund genuinely additional spending, such as abolishing the limit on child benefit. Removing it "costs" the Treasury a mere £2.5bn, because it was always a bit of political theatre from George Osborne. A Labour government should have abolished it in its first 100 days.

The True Audience: Financial Institutions

The Tories, Reform and the entire Blue Pravda have spent days barking about the idea that Reeves conforms to the caricature of left-wing finance ministers, soaking hard workers to spend on shirkers. Party MPs have been applauding her budget as balm for their troubled consciences, protecting the most vulnerable. Both sides are 180-degrees wrong: The Chancellor's budget was largely targeted towards asset managers, hedge funds and participants within the bond markets.

Downing Street can make a strong case in its defence. The margins from the OBR were deemed insufficient to feel secure, particularly given that lenders charge the UK the highest interest rate of all G7 rich countries – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries far greater debt. Combined with the measures to hold down fuel bills, prescription charges as well as train fares, Starmer and Reeves can say their plan enables the Bank of England to cut its key lending rate.

It's understandable why those wearing Labour badges might not couch it in such terms when they visit #Labourdoorstep. As a consultant to Downing Street says, Reeves has effectively "utilised" financial markets to act as a tool of discipline against Labour MPs and the voters. This is the reason Reeves cannot resign, regardless of which pledges she breaks. It is also the reason Labour MPs will have to knuckle down and vote to take billions off social security, as Starmer indicated yesterday.

A Lack of Statecraft and an Unfulfilled Promise

What's missing here is the notion of statecraft, of mobilising the finance ministry and the central bank to reach a fresh understanding with markets. Also absent is any innate understanding of voters,