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The accusation is a serious one: that Rachel Reeves has lied to Britons, frightening them to accept massive extra taxes that could be funneled into higher benefits. However hyperbolic, this isn't typical political sparring; this time, the consequences could be damaging. Just last week, critics aimed at Reeves and Keir Starmer were labeling their budget "a mess". Today, it's branded as lies, and Kemi Badenoch calling for the chancellor to quit.

This serious charge demands straightforward responses, so let me provide my view. Did the chancellor been dishonest? Based on the available evidence, apparently not. She told no whoppers. But, notwithstanding Starmer's yesterday's remarks, it doesn't follow that there's no issue here and we can all move along. The Chancellor did misinform the public regarding the factors shaping her choices. Was this all to channel cash to "benefits street", as the Tories claim? Certainly not, as the figures demonstrate it.

A Reputation Sustains Another Hit, Yet Truth Must Prevail

The Chancellor has taken a further blow to her standing, but, should facts still matter in politics, Badenoch ought to call off her attack dogs. Maybe the stepping down yesterday of the Office for Budget Responsibility (OBR) chief, Richard Hughes, due to the unauthorized release of its internal documents will quench SW1's appetite for scandal.

But the real story is far stranger compared to media reports suggest, extending wider and further beyond the careers of Starmer and the 2024 intake. At its heart, herein lies a story concerning what degree of influence the public have over the governance of our own country. This should concern everyone.

Firstly, to Brass Tacks

When the OBR released recently a portion of the projections it provided to Reeves while she prepared the red book, the surprise was instant. Not merely had the OBR not acted this way before (described as an "exceptional move"), its numbers seemingly went against Reeves's statements. While leaks from Westminster were about how bleak the budget would have to be, the watchdog's predictions were getting better.

Consider the Treasury's so-called "unbreakable" fiscal rule, stating by 2030 daily spending for hospitals, schools, and other services must be wholly funded by taxes: at the end of October, the OBR reckoned it would just about be met, albeit only by a tiny margin.

A few days later, Reeves held a press conference so extraordinary it forced breakfast TV to break from its usual fare. Several weeks before the actual budget, the country was warned: taxes were going up, and the primary cause cited as gloomy numbers from the OBR, in particular its finding that the UK was less efficient, investing more but yielding less.

And so! It happened. Despite what Telegraph editorials and Tory broadcast rounds implied over the weekend, that is essentially what happened at the budget, that proved to be significant, harsh, and grim.

The Deceptive Justification

Where Reeves misled us concerned her justification, because those OBR forecasts did not force her hand. She could have chosen other choices; she could have provided other reasons, including on budget day itself. Prior to the recent election, Starmer promised exactly such people power. "The hope of democracy. The power of the vote. The potential for national renewal."

One year later, and it is powerlessness that jumps out from Reeves's pre-budget speech. Our first Labour chancellor for a decade and a half portrays herself to be an apolitical figure at the mercy of factors outside her influence: "In the context of the long-term challenges on our productivity … any chancellor of any political stripe would be standing here today, confronting the choices that I face."

She certainly make decisions, only not one the Labour party cares to broadcast. Starting April 2029 UK workers and businesses will be paying an additional £26bn a year in taxes – and most of that will not be funding better hospitals, new libraries, nor happier lives. Whatever nonsense comes from Nigel Farage, Badenoch and their allies, it isn't being lavished upon "welfare claimants".

Where the Money Really Goes

Rather than going on services, over 50% of the additional revenue will in fact provide Reeves cushion for her self-imposed budgetary constraints. About 25% goes on covering the administration's U-turns. Reviewing the watchdog's figures and giving maximum benefit of the doubt towards a Labour chancellor, only 17% of the tax take will fund genuinely additional spending, for example abolishing the two-child cap on child benefit. Its abolition "costs" the Treasury a mere £2.5bn, as it was always a bit of theatrical cruelty from George Osborne. A Labour government should have have binned it immediately upon taking office.

The Real Target: Financial Institutions

Conservatives, Reform and all of Blue Pravda have been railing against the idea that Reeves conforms to the stereotype of Labour chancellors, taxing strivers to spend on shirkers. Party MPs have been cheering her budget for being a relief for their troubled consciences, protecting the disadvantaged. Both sides are 180-degrees wrong: The Chancellor's budget was primarily targeted towards investment funds, hedge funds and participants within the financial markets.

Downing Street could present a compelling argument for itself. The forecasts provided by the OBR were deemed too small for comfort, particularly given that bond investors demand from the UK the highest interest rate among G7 developed nations – exceeding that of France, that recently lost a prime minister, and exceeding Japan that carries way more debt. Coupled with the policies to cap fuel bills, prescription charges as well as train fares, Starmer together with Reeves argue this budget allows the Bank of England to reduce its key lending rate.

You can see that those folk with red rosettes may choose not to couch it this way next time they visit the doorstep. As a consultant for Downing Street says, Reeves has effectively "utilised" the bond market as a tool of control against Labour MPs and the voters. It's the reason Reeves can't resign, no matter what pledges she breaks. It is also why Labour MPs must fall into line and vote that cut billions from social security, just as Starmer promised recently.

A Lack of Political Vision and an Unfulfilled Pledge

What's missing from this is any sense of strategic governance, of harnessing the finance ministry and the Bank to forge a fresh understanding with markets. Missing too is intuitive knowledge of voters,