Middle class earners could be hit with higher taxes later this year, a senior Cabinet minister has hinted, as Labour eyes new ways to plug a multi-billion-pound black hole in the public finances, reports The Telegraph.

Transport Secretary Heidi Alexander said the Government remained committed to protecting “people on modest incomes”, but hinted the wealthier could face tax rises in the Chancellor’s upcoming autumn Budget.

Rachel Reeves is said to be weighing up new wealth taxes, with ministers suggesting those on higher incomes may be asked to pay more.

A Treasury spokesman insisted on Sunday that the Government was focused on “keeping taxes for working people as low as possible.”

Labour’s manifesto ruled out hikes to income tax, National Insurance and VAT. But asked on Sky News whether wealth taxes were being considered, Ms Alexander admitted they were “not directly” discussed at Cabinet but refused to rule them out.

“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people,” she said. “We have stuck to that. We are determined, when it comes to taxation, that fairness is going to be our guiding principle.”

Her comments mark the clearest sign yet that wealthier workers could be targeted in the Chancellor’s Budget after Labour was forced into several expensive U-turns on welfare and winter fuel support.

The revelation comes ahead of Rachel Reeves’ major Mansion House address, where she is expected to unveil a radical shake-up of the City, echoing Margaret Thatcher’s “Big Bang” reforms.

The Chancellor is also tipped to announce a review of private sector pensions, with a possible hike in employer contributions through auto-enrolment.

Ministers are increasingly concerned about the rising cost of the state pension and are exploring reforms that would encourage workers to rely more heavily on private retirement plans.

But business groups have warned that such changes could pile pressure on struggling firms and push wages down.