Alistair Darling, chancellor, is to target the wealthy with a new top rate of tax to help pay down soaring government borrowing, as he prepares to unveil a £12.5bn VAT cut to encourage Britain to shop its way out of recession.

Mr Darling will announce plans for a new 45p top tax rate to be set at about £150,000 a year, to be introduced after the next election. He accepts that a tight squeeze on public spending alone will not plug the hole in the government’s finances.