Prime Minister Sir Keir Starmer has warned the Budget will be “painful”, with the government admitting some taxes will rise.

It will be the government’s first big opportunity to set out its spending and taxation priorities, but it comes against a backdrop of higher debt following the pandemic, higher interest rates and inflation that has only recently returned to normal levels.

There is growing debate over what tax rises Chancellor Rachel Reeves will announce given the government has promised not to increase the burden on “working people” and ruled out increasing VAT, National Insurance or income tax.

A hike in capital gains tax has been rumoured. This is charged on profits made from the sale of an asset that has increased in value, such as second homes. Other choices available to the chancellor include reducing the tax relief on pensions and raising fuel duty.

It is also unclear if Labour’s pledge on not raising National Insurance applies to the element of the tax paid by employers, after Sir Keir side-stepped a question from Conservative leader Rishi Sunak at Prime Minister’s Questions this week.

Adrian Hanrahan, managing director of chemicals exporter Robinson Brothers, said increasing National Insurance contributions for employers was “just another tax on companies”.

“I really feel like as a manufacturing company in this country we are a sitting duck for taxes. We can’t move any place, therefore we are easy prey,” he told BBC Newsnight.

Mr Hanrahan also criticised parts of the government’s Employment Rights Bill, in particular the proposed nine-month probation period for new staff.

“If this is a government of growth… this will not help us grow in any way in the future,” he said.