Today the Chancellor announced around £20 billion worth of additional borrowing, over and above the near £100 billion the government would have borrowed anyway. This money will be used to fund a reduction in the VAT rate and a number of other small measures. The Government has announced that this additional borrowing will be paid back after the next election by a new 45% top rate of tax for those earning over £150,000 and National Insurance increases of 0.5% for both employers and employees.

Policy Exchange investigates if these measures will work.