CHANCELLOR Alistair Darling today slashed VAT in a £20 billion cash boost to revive the ailing economy.

But he said the give-away would have to be paid for with increases in duty on petrol, alcohol and tobacco.

National insurance will also have to go up - as will the top rate of income tax as the economy begins to pick up from 2010.

The Chancellor warned the Commons that borrowing would rocket to £118 billion next year as the Government ensured that money flowed into the economy when it was needed.

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