The Government could be considering major tax cuts in a bid to win over traditional Tory voters after the two by-election defeats this week.

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

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

The suggested tax cuts come after Labour claimed “historic” victories by overturning large Conservative majorities in Thursday’s by-elections in Tamworth and Mid-Bedfordshire.

The Telegraph report said about 5.6 million people pay the higher rate of income tax which is levied on earnings over £50,271, with Tory strategists believing “many of them vote Conservative and would be boosted by the tax cut”.

The Times also suggests a tax cut could be on its way in 2024 ahead of the next general election, with the most likely course being a reduction of stamp duty because it is seen to be “aspirational” as it could “boost the economy by making it cheaper to move” and also appeal to middle-aged voters “who had deserted the party”.

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

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

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

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

A Downing Street spokeswoman declined to comment on the reports and added: “I wouldn’t be able to speculate ahead of a fiscal event.”