Budget 2021: What can we expect from the Chancellor?

25 October 2021, 10:34 | Updated: 26 October 2021, 12:16

Chancellor Rishi Sunak will deliver the budget on Wednesday
Chancellor Rishi Sunak will deliver the budget on Wednesday. Picture: Alamy

By Daisy Stephens

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.

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.

Read more: PM announces 1.25% 'manifesto breaking' tax hike to fund social care reform

Read more: National Insurance rise: How much more will you need to pay?

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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.

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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.

Alcohol prices

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.

Read more: Price of a pint 'set to rise by 30p, and could hit £6 in London'

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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.

Read more: Government plans to lower student loan repayment threshold - reports

Council tax

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.

Read more: Poorer areas could see 'even larger' council tax increases than projected, says IFS Director

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.

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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.

Read more: NHS to receive £6bn in Budget to help clear backlog in England

Read more: GPs threaten industrial action over Govt plans for face-to-face appointments

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.