Rachel Reeves will reveal £35bn tax bombshell in Labour’s first budget within hours – as Chancellor warned she has committed ‘the biggest rip-off in modern political history’

Rachel Reeves will reveal a £35bn tax bomb within hours in what critics have called ‘the biggest heist in modern political history’.

In one of the most important budgets for years, the Chancellor will put Britain on a path of high taxes, high spending and high debt in a gamble designed to kick-start growth.

In her speech broadcast tonight, Ms Reeves said: ‘The only way to increase economic growth is to invest, invest, invest.

‘There are no shortcuts. ‘In order to realize this investment, we must re-establish economic stability.’

Ms Reeves, who will be the first woman in history to deliver a Budget, will confirm the relaxation of the government’s fiscal rules, which will allow her to borrow up to £50bn to spend on infrastructure projects and growth sectors such as green energy.

But ministers will be watching with concern the reaction in the City, where yesterday the government’s borrowing rate rose to the highest level since the election, leading to fears that mortgage interest rates will rise.

The Chancellor is also bracing for a backlash from the business community over his decision to focus tax increases on employers; This included a £20 billion hit to National Insurance, which critics warned would cost jobs and reduce wages.

The CBI warned that the tax increase, combined with a large increase in the minimum wage, would ‘make it increasingly difficult for firms to find the headroom to invest in the technology and innovation needed to boost productivity and deliver sustainable increases in wages’.

Investors are also expected to be affected by the increase in capital gains tax. And despite Labour’s promise to protect ‘working people’, many ordinary workers will also be hit by the decision to extend the six-year freeze on tax thresholds for at least another year.

Conservative leadership contender Robert Jenrick said: ‘This Budget completes the greatest heist in modern political history. Labor came to power by lying to the British public about its plans to raise taxes.

‘Working people will suffer and our economic recovery will take a huge hit. ‘No wonder the public doesn’t trust politicians.’

Rishi Sunak, who will respond to the Budget on Wednesday as Conservative leader, said the expected rise in NI would be a clear breach of Labour’s manifesto, which promised not to increase income tax, national insurance or VAT.

The former Prime Minister pointed out that the Chancellor had previously condemned the idea of ​​increasing employers’ NI as a ‘business tax’.

He said: ‘Rachel Reeves has promised her plans are fully funded and she won’t change her debt target because that would be ‘distorting the figures’.

‘We already know these promises are completely worthless because he will change his financial rules so he can go on a borrowing spree.

‘It would be a complete betrayal if he compounded this by breaking his promise to the British people not to increase taxes on workers by increasing National Insurance.’

Yesterday Ms Reeves appeared to drop her election promise to protect ‘working people’ from higher taxes, saying only that she was ‘determined to ensure no worker sees higher taxes on their payroll after the Budget’.

Today he will try to lay the blame for the Budget pain at the door of the Conservatives.

He will accuse Jeremy Hunt of leaving a £22bn ‘black hole’ in the public finances.

And he will say that the spending plans left behind by the last government amount to a ‘fiscal fiction’ that will lead to a return to austerity.

Instead it is expected to put more money into the NHS and other public services.

He said last night the Budget could put Britain on the path to ‘tremendous’ rewards such as higher growth and better public services.

He said the measures would ‘open a new chapter of low growth and mark the beginning of a new chapter in making Britain better off’. ‘This will mean more money in people’s pockets, an NHS that’s there when they need it, and businesses that create wealth and opportunity for everyone.’

But the cabinet acknowledged it had to make ‘difficult choices’ on taxes, spending and welfare, briefing yesterday outlining its budget plans.