Budget latest: Chancellor’s praise leaves Hunt stunned in likely final showdown

We are awfully close to Rachel Reeves presenting the first budget of this government.

You’ll be able to watch and follow live on Sky News platforms – including here on the Politics Centre.

Here’s what we expect.

No increases in income tax, national insurance or VAT

Labor ruled out a rise in income tax, national insurance and VAT in its election manifesto, promising to protect “working people” – although who they defined as a “working person” was questioned.

The Chancellor is also expected to extend the freeze on income tax thresholds by two years until 2030, after the previous Conservative government froze them until 2028.

An increase in employers’ social security contributions

The amount employers pay into National Insurance is set to increase by up to two percentage points, with the money partly used to give cash injections to reduce NHS waiting lists.

A government source told Sky News: “There is broad agreement that the NHS needs more money.

“That means reaching out to companies for help.”

Apartments

The government has confirmed a large increase in the number of affordable housing units.

It says the £500 million new funding will help build up to 5,000 social homes and increase total investment in housing supply to £5 billion under the Affordable Homes program.

£1.4 billion for failing schools

The Chancellor has promised her budget will include £1.4 billion to rebuild failing schools.

She said children “should not suffer” from a reduction in the UK’s public budget, while economists said the funding would essentially ensure existing plans continued, rather than paying for many new initiatives.

Funding for nurseries, breakfast clubs and childcare

The Treasury has confirmed that £1.8 billion will go towards expanding government-funded childcare, with a further £15 million going to school nurseries.

The Treasury said the first stage of the plan would cover the costs of creating 300 new or expanded nurseries across England.

Ms Reeves also said she would “triple” investment in free breakfast clubs to £30m in 2025-26, after announcing at September’s Labor conference that a £7m trial would start in as many as 750 from April schools.

Abolition of VAT for private schools

Labor has long been clear about its plans to scrap VAT exemption and business rates relief for private schools to fund 6,500 new teachers in state schools.

Details of the government’s assessment of the expected impacts of these policy changes will be published on October 30 after the budget is published.

That’s just two months before the policy goes into effect on January 1, 2025, but military families, many of whom send their children to private boarding schools because they could be sent overseas at short notice, are now expected to be exempt.

Changes to the £2 maximum bus fare

From 1 January 2023, bus fares on over 4,600 routes in England are £2.

Hundreds of operators outside London took part in the programme, which cost around £500 million.

However, the limit, which is currently scheduled to apply until at least December 31, will be increased to £3.

Minimum wage increase

Rachel Reeves may announce an above-inflation minimum wage increase when she presents her first budget tomorrow, reports suggest.

It is believed that the Chancellor will raise the minimum allowance by up to 6% next year for more than a million low-paid workers.

Billions will go to the NHS

The government is expected to commit up to £10 billion to the NHS, mainly to help it deal with rising post-Covid-19 waiting lists, which now stand at a record 7.6 million, and to fulfill its promise of another 40,000 hospital visits weekly.

Extension of care allowance

Ms Reeves is expected to raise the limit on how much people can earn before becoming ineligible for Carers’ Benefit from £151 a week to £181.

This would mean tens of thousands of carers who are not currently eligible for the benefit would receive an extra £81.90 a week under the scheme.