Over the next five years the Government will spend £250m to pay for pothole repairs and a further £250m in a major new permanent lorry park to take pressure off the roads in the event of Operation Stack.
The compensation culture will be tackled too with reforms made to claiming for minor car accidents. The reforms will remove the right to general damages for minor soft tissue injuries and remove legal costs by transferring personal injury claims of up to £5,000 to the small claims court.
Osborne said £1 billion can be saved in the industry and this should be "passed on" to motorists by insurers. It could cut between £40-£50 per year off insurance premiums.
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The removal of the three per cent diesel supplement from company cars will also be delayed until 2021 ahead of the new EU testing regulations. Ultra-low emissions vehicles will continue to be supported, too, with £600 million invested between 2015-16 and 2020-21 to help uptake and manufacturing.
The Department for Transport's operational budget will fall by 37 per cent but its capital spending will be increased by 50 per cent to £61 billion - "the biggest increase for a generation".
Osborne said: "It is the largest road investment programme since the 1970s - for we are the builders."
There was no announcement on if fuel duty would be cut and Osborne also offered no clarification on the plug-in car grant which is due to expire in 2016.
Industry reactionSteve Gooding, director of the RAC Foundation, said: “The extra £50 million per year for road maintenance won’t clear the pothole backlog which the government itself puts at £8.6 billion but any extra money is welcome.
“After decades of dithering it is pleasing to see £250 million allocated to keep Kent’s roads clear when there is cross-channel disruption. HGVs should be parked up in permanent sites not on the motorways.
“With air quality at the top of many agendas it is no surprise that the Chancellor has decided to delay the abolition of the diesel surcharge on company car tax.”
MPs call for diesel scrappage scheme and VED reformsMPs had called on the Government to consider a diesel scrappage scheme and introduce a nitrogen oxide-based vehicle excise duty (VED) but Osborne steered clear of the area in his Spending Review.
A report from the Environmental Audit Committee published in response to the Government's draft plans to improve air quality in the UK had called on the changes with MPs believing a diesel scrappage scheme and including NOx alongside CO2 to determine VED bands would encourage drivers out of the most polluting diesel vehicles.
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Irranca-Davies said: "Tens of thousands of premature deaths are being caused in the UK every year by illegal levels of air pollution on our roads. Despite mounting evidence of the damage diesel fumes do to human health, changes to Vehicle Excise Duty announced in this year’s Budget maintained the focus only on CO2 emissions. This was a missed opportunity to also incentivise vehicles which emit less NO2.
"The Treasury must use VED to create long-term incentives for drivers to buy cleaner hybrid and electric cars that minimise both CO2 and harmful pollutants. Introducing a national diesel scrappage scheme could also provide a short-cut to cleaning up the air in our cities.”