Rachel Reeves and Labour have completed “the biggest heist in modern political history”, Robert Jenrick has declared.

The Tory leadership candidate said Sir Keir Starmer’s party “won power promising not to raise taxes. They lied.”

Ms Reeves set out a Budget which will hike taxes by £40 billion as she promised to “fix the foundations” of the economy and repair the public finances.

But former Tory minister Neil O’Brien blasted: “Reeves says there is a £40 BILLION tax increase in the budget = £1,400 for every household.”

And former Prime Minister Rishi Sunak said Labour has increased taxes to “record levels”.

Employers’ national insurance contributions will rise by 1.2 percentage points to 15% in April 2025, and the threshold for paying them will fall from £9,100 per year to £5,000, the Chancellor has announced.

Ms Reeves said: “I am announcing an increase in employers’ National Insurance contributions. We will increase the rate of Employers’ National Insurance by 1.2 percentage points, to 15%, from April 2025.

“And we will reduce the Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – from £9,100 per year to £5,000.

“This will raise £25bn per year by the end of the forecast period. I know that this is a difficult choice. I do not take this decision lightly.”

Ms Reeves also ramped up the lower rate of capital gains tax from 10pc to 18pc, and the higher rate from 20pc to 24pc, while maintaining the rates of capital gains tax on residential property at 18pc and 24pc.

The Chancellor announced a £2.5 billion increase in capital gains tax by increasing the lower rate from 10% to 18% and the higher rate from 20% to 24%.

She also confirmed changes to inheritance tax, including bringing pension pots within the tax from April 2027, and reforms to agricultural and business property reliefs, raising a total of £2 billion a year.

Mr Jenrick blasted: “Labour complete the biggest heist in modern political history.

“They won power promising not to raise taxes.

“They lied.”

The Office for Budget Responsibility said Ms Reeves’s plan “delivers a large, sustained increase in spending, taxation, and borrowing”.

Public spending increases by almost £70bn a year over the next five years.

“As a result, the size of the state is forecast to settle at 44pc of GDP (gross domestic product) by the end of the decade, almost five percentage points higher than before the pandemic.”

Half of the increase was funded through tax hikes raising around £36bn a year and pushing the tax take to a “historic high of 38pc of GDP by 2029-30”.

The other half is funded by £32bn a year of increased borrowing, which the OBR called “one of the largest fiscal loosenings of any fiscal event in recent decades”.

Former Prime Minister Rishi Sunak declared Labour has increased tax to record levels.

Mr Sunak said: “This is the truth: They have fiddled the figures, they have raised tax to record levels.

“They have broken their promises and it is the working people of this country that are going to pay the price.

“The Chancellor and Prime Minister have tried to say that they had no choice but be in no doubt, their misleading claims about the state of the economy are nothing but a cynical political device.”