Radical plans to step up motorway building with a new “Roads Fund” were among the key measures unveiled by the Chancellor yesterday.
In the last 25 years, France has built more than 2,500 miles of motorway while Britain has built just 300, MPs heard.
The Chancellor also said fuel duty will be frozen next year, to the delight of motorists.
Road tax revenues – currently worth about £6 billion – are now to be entirely directed towards building new roads as originally intended, George Osborne said.
And although he can only apply the funding to England, business leaders north of the Border are already calling on the SNP government to adopt a similar approach. Mr Osborne said talks will now be held with the SNP Government about how the extra money is spent in Scotland.
“I am creating a new Roads Fund,” he said.
“From the end of this decade, every single penny raised in vehicle excise duty in England will go into that fund to pay for the sustained investment our roads so badly need.
“Tax paid on people’s cars will be used to improve the roads they drive on.”
Mr Osborne also announced reforms to the current system of road tax in his Budget, reducing the number of bands to three, meaning that new low-emission vehicles will no longer escape tax.
Andy Willox, of the Federation of Small Businesses in Scotland, said: “Moves to link vehicle excise duty with spending on roads seem like a sensible shift in gear. Many of Scotland’s local and national roads need upgrade or repair. Decision-makers in Scotland may want to consider this link and allocate any consequentials appropriately.”
Friends of the Earth senior economics campaigner David Powell said: “Money raised from taxing cars shouldn’t be spent on yet more roads, which will simply encourage more traffic.”