The warning, from former Chancellor Kwasi Kwarteng, comes as Labour prepares to clobber millions of people with up to £40 billion in tax hikes.

Rachel Reeves is preparing to hit employers with a whopping £20 billion increase in their National Insurance bills and announce a welter of other expected tax rises on Wednesday.

It is also likely to include increases to capital gains and inheritance taxes and extend freezes to income tax thresholds, dragging more people into higher rates as wages rise with inflation.

Amid growing alarm among Labour MPs over the potential long-term electoral impact of the measures Mr Kwarteng warned: “Wednesday’s Budget will raise taxes across the board. Make no mistake: Middle Britain is firmly in the firing line.”

Writing in the Mail on Sunday, he added: “Labour says it needs to raise taxes in order for the Office of Budget Responsibility to be satisfied that the Government can pay its bills.

“Having complained about the ‘black hole’ left by the Tories, their first act was to cut an inflation-busting deal with the unions – the people who bankroll the Labour Party.

“Then they axed the Winter Fuel Payment for millions of pensioners.

“We are told that new taxes will be raised on ‘the rich’, who may include landlords with just a couple of properties. VAT will be levied on private school fees.

“To cap it all, billions will be raised by forcing employers to pay more National Insurance.

“It is as if the Government is actually waging war on wealth creation.”

The former Tory MP, who was sacked as Chancellor by Liz Truss after his budget in September 2022 led to financial turmoil, said he fears Labour will “crush” Britain’s ability to thrive on “invention, enterprise and innovation”.

“It is this spirit which I fear Labour will now crush. Class war is back. The stupidity of trying to distinguish between workers and investors in property and other assets is pure socialism.

“Many people will have pensions and other relatively small investments, such as a buy-to-let flat. This is especially the case for elderly people.

“Raising taxes on employers, with National Insurance increases, is essentially a tax on jobs. How is that meant to increase growth?

“This question is crucial, because without growth the Government will simply be forced to increase taxes again.

“Their union bosses won’t allow them to reduce spending so the Government will have to raise money through more taxes. The risk is that, having raised taxes, anaemic growth will cause tax revenues to stagnate.

“Ministers would then have to raise taxes to pay for our welfare state and millions of state employees.

“It’s what happens if we fail to generate growth in two or three years that deeply concerns me. More tax, more spend and poor growth. Repeat.

“This is the doom loop Rachel Reeves herself referred to in Opposition.

“The danger of this Budget is overshadowed by the prospect of another four years of Labour budgets, in which taxes rise to levels which will destroy incentives and ambition.

“Four years in which the hopes of working people will be shattered by the sledgehammer of Labour tax and spend.”

“The stupidity of trying to distinguish between workers and investors in property and other assets is pure socialism.

“The hopes of working people will be shattered by the sledgehammer of Labour tax and spend.