Rachel Reeves’ ￡40 billion plan could involve tax rises three times the size of George Osborne’s in 2010, the head of a leading think tank has warned.

       Paul Johnson, the director of the Institute for Fiscal Studies (IFS), said tax increases on that scale would be “extraordinary” and “unprecedented”, dwarfing the measures imposed by the coalition government in the wake of the financial crisis.

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       Ms Reeves is thought to be planning a raid on National Insurance in the Budget as one of several tax rises to help raise ￡40 billion, which is far more than the ￡22 billion fiscal hole she claims to have inherited from the Conservatives.

       She intends to use the extra money to prop up the NHS and ensure that no Government department has to endure a real-terms spending cut this year.

       It is understood that most of the ￡40 billion will be raised through tax rises rather than spending cuts, in what Jeremy Hunt, the shadow chancellor, said would be “one of the most damaging Budgets in history”.

       Mr Johnson said it would be “unprecedented” if Ms Reeves introduced tax increases on that scale.

       Speaking to BBC Radio 4’s Today programme, he said: “If we get tax rises on that scale, that really would be extraordinary. I mean, unprecedented.

       “That would be tax rises sort of three times as big as George Osborne, for example, introduced back in 2010 in the depths of the aftermath of the financial crisis.”

       He added: “Now, 40 billion is a big number. You can get there relatively easily, actually, in terms of the scale of additional spending that will be required down the line.

       “Some of that will be covered by slight changes in the fiscal rules, some of that will be covered by some of the tax rises that the Labour Party are already intending, but that would still leave a significant amount of additional tax revenues required.”

       In his first 2010 Budget, Mr Osborne increased VAT from 17.5 per cent to 20 per cent as part of a package of drastic measures he said were designed to pay for Labour’s “past irresponsibilities”.

       Capital gains tax was also raised from 18 per cent to 28 per cent for higher-rate taxpayers in a move aimed at raising almost ￡1 billion from investors.

       ‘Very big hole in public finances’

       Mr Johnson also accused Sir Keir of denying the scale of the problem with the public finances in the run up to the election.

       “If you are, as the Government, wanting to not just protect public services but significantly increase spending on the health service and increase spending on other things in line with the size of the economy, yes, there is a very big hole in the public finances,” he said.

       “Now, of course, we’ve always known this. I mean, we’ve had this discussion through the election when we were warning that there were these problems, and Keir Starmer and others were going: ‘o, no, no, no, there’s no such issue’.”

       Sir Keir refused to rule out raising employers’ NI contributions on Tuesday, despite claims that it would break a commitment in Labour’s manifesto not to increase the levy.

       Rishi Sunak, in his role as chancellor in 2021, announced an NI increase on employers and employees of 1.25 per cent to pay for social care, but the rise was later cancelled.

       Writing for The Telegraph, Mr Hunt said: “It appears that the new Labour Government’s first Budget will mean lower growth, lower wages, and fewer jobs – with working people paying the price.

       “It’s a bad sign they are abandoning their manifesto promises so quickly. This is shaping up to be one of the most damaging Budgets in memory.”