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Budget 2021: What can we expect from the Chancellor?
25 October 2021, 10:34 | Updated: 26 October 2021, 12:16
Chancellor Rishi Sunak is set to deliver his budget on Wednesday - but what is he expected to announce?
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On Wednesday Rishi Sunak will reveal the Government's spending plans for the year. With soaring gas prices, Government spending at an all time high outside of wartime, and looming uncertainty about what's next for Covid-19, it is one of most important budgets a chancellor has ever had to deliver. Here are some things to watch out for.
- LBC will bring you live coverage of Rishi Sunak's Budget Review on Wednesday from 12:30 and you can watch it on lbc.co.uk, listen live or watch in full on the Global Player.
No big tax rise expected
The first thing to note is that there are not any big tax increases expected - because they have already been announced.
In September the Prime Minister announced a manifesto-breaking hike to National Insurance. Before that, in his March budget, Mr Sunak announced an increase to corporation tax.
Because of this, a further increase to taxes at this point is unlikely.
Minimum wage increase
The chancellor is set to announce an increase in minimum wage.
Earlier this month at the Conservative Party conference the Prime Minister said he wanted to create a "high wage, high skill, high productivity economy" - hinting at an intention to lift minimum wage.
Currently, the minimum wage for those over the age of 23, known as the national living wage, is £8.91 per hour - that is now set to climb to £9.50.
There is speculation that changes could be announced affecting the price of certain alcoholic drinks.
If announced, a reform to alcohol duties could see English sparkling wine and kegs of beer get cheaper.
However, taxes on spirits could also be hiked, meaning things like whiskey and gin could get more expensive.
Student loan threshold
The threshold at which graduates start paying back their student loans could be reduced in an effort to save the Treasury money, according to reports.
At the moment the threshold is £27,295, meaning graduates pay back 9 per cent of anything they earn above this amount.
There are reports that this could be brought down to as low as £23,000.
Government funding makes up an important part of council budgets. If the Government reduces the proportion of council budgets they provide, local authorities may need to up their council tax in order to carry on providing services such as libraries, bin collections and licensing.
Public sector pay
The chancellor previously announced a pay freeze for public sector workers - such as teachers, police officers and firefighters - during the pandemic.
Mr Sunak is now due to lift this in the future and is set to confirm this in Wednesday's budget.
NHS backlog funding
This is something we know is going to happen.
The NHS will receive almost £6bn to help the clear the backlog of patients as a result of the coronavirus pandemic.
The money will allow them to deliver around 30 per cent more elective - meaning non-urgent - activity such as checks, scans and procedures.
Health and Social Care Secretary Sajid Javid said the Government would do "whatever it takes" to tackle the issues faced by the health service.
"Our phenomenal NHS has worked so hard to keep people safe during the pandemic and we'll do whatever it takes to make sure people are getting the treatment they need as quickly as possible," he said.
"This £6 billion investment will support the delivery of millions more checks, scans and procedures for patients across the country."
The plans will be confirmed at Wednesday's budget.