What To Expect In First Conservative Budget

Some warn this will be the "moment of maximum pain" - and there will be cuts - but expect some giveaways to sweeten the pill.

It is George Osborne's first Budget without the Liberal Democrats and he is expected to prescribe some hard-to-swallow medicine for the country.

It is likely he will get the tough measures out of the way before the country heads to the polls in 2020.

Remember, Mr Osborne is in the running to lead the Conservatives into the next General Election after David Cameron said he would serve no more than two terms as Prime Minister.

Here's what to expect in the Chancellor's seventh Budget:

1) Inheritance tax: Mr Osborne will increase the rate at which the 40% tax is paid on family homes to £1m from April 2017. It is currently £650,000.

2) Rich social housing tenants: those earning more than £30,000 (£40,000 in London) and living in council or housing authority homes to pay the full market rent. This will hit around 340,000 people and save the Treasury £250m a year.

3) Housing benefit: Mr Osborne has suggested abolishing the benefit for the under-25s. This could bring in £1.5bn.

4) Benefits cap: the amount of benefits one family can receive will be reduced from £26,000 to £20,000 - £23,000 in London.

5) Pension tax relief: those earning more than £150,000 will see a cut in pension tax relief. It's a generous perk for high earners.

6) Tax credits: the Prime Minister has indicated he will attack these in-work benefits, which cost £30bn a year (nearly 14% of welfare spending).

It will hit the poorest workers but it is an area where significant savings can be made. The Institute for Fiscal Studies has suggested if Mr Osborne returned credits to 2003 levels it could raise £5bn. It would hit 3.7m people and see them lose around £1,400 a year.

7) Personal allowance: the Government is committed to raising the level at which workers start to pay tax to £12,500 by 2020. It currently stands at £10,600. Continues a trend started under the coalition - a Lib Dem policy.

8) Minimum wage: another manifesto pledge will see this linked to the personal allowance . Basically it will mean that anyone on the minimum wage, working 30 hours a week will not have to pay any income tax.

There have been some calls, including from Tory leadership rival Boris Johnson, that the Chancellor should encourage firms to pay the living wage of £7.85 an hour, £9.15 in London, rather than the minimum wage of £6.50 an hour. Such measures could be a white rabbit to soften the tax credits blow.

9) Raise the 40% income tax threshold: there's a manifesto pledge on this one too. It will be raised to £50,000 although don't necessarily expect this on Wednesday. Mr Osborne will not want to be seen cutting to the poor and giving to the better off. He will also want to save something for nearer 2020, given he is favourite to lead the Conservatives into the next election.

Mr Johnson has called on Mr Osborne to scrap the 45p rate of income tax, setting out his own stall for the 2020 race to Number 10. This is, however, unlikely.

10) Tax avoidance: the Conservatives promised to deliver £5bn of savings by clamping down on tax avoidance so expect measures here.

Mr Osborne might stop "non dom" status , which allows people to avoid paying tax, from being inherited.

11) BBC: the broadcaster will have to make £650m of savings to pay for free television licences for the over-75s.

This allows the Chancellor to file the saving as a "welfare cuts" meaning it will count against the £12bn of cuts he promised to find.

Mr Osborne has suggested the BBC could find this money by looking at its £174m a year spend on its website operation.