After two by-election defeats this week, the government could consider major tax cuts to win over traditional Tory voters.

The threshold for paying the 40% higher rate of income tax could be raised in the Spring 2024 Budget, according to a report in the Daily Telegraph.

The Times reported that Prime Minister Rishi Sunak and Chancellor Jeremy Hunt are considering cuts to stamp duty or inheritance tax.

The proposed tax cuts come after Labor secured “historic” victories by toppling large Conservative majorities in Thursday’s by-election in Tamworth and Mid-Bedfordshire.

The Telegraph report said around 5.6 million people pay the higher rate of income tax, which is levied on income above £50,271, with Tory strategists believing “many of them vote Conservative and would benefit from the tax cut”.

The Times also suggests that a tax cut could be on the cards in 2024 before the next general election, with the most likely route being a cut in stamp duty as it is seen as “desirable” as it could “boost the economy by…” “It’s cheaper to move” and also to appeal to middle-aged voters “who have left the party.”

Speaking to broadcasters as he prepared to fly back to the UK from a meeting with Middle East leaders, Mr Sunak admitted the by-election had produced “obviously disappointing results” but that it was “important to remember to remember the context”.

He said: “Mid-term elections are always difficult for incumbent governments. And of course local factors also play a role here.”

The Prime Minister added that even after the defeats, he “remains committed to delivering on the priorities of the British people.”

Mr Sunak said he would “move on” with his five priorities, which include halving inflation and stopping migrants in small boats crossing the English Channel.

A Downing Street spokeswoman declined to comment on the reports, adding: “I would not be able to speculate in advance of a financial event.”

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