Chancellor George Osborne is setting up a new National Roads Fund to pay for highways investment.
Osborne revealed in the budget announced on the 8th July 2015 that cash raised by a revised Vehicle Excise Duty (VED) system will be pumped into road spending. The money raised from VED will be ring-fenced for road investment, something not seen since the 1930s.
Revenue from VED is currently falling as more new cars are exempt due to improving emission standards. Therefore for cars registered after 1 April 2017, VED will be transformed into three bands – zero, standard and premium. The new VED bands will be pegged to emissions – 95% of car owners will pay £140 a year.
Further updates in the budget included no rise in fuel duty this year with rates continuing to be frozen. The Chancellor also boosted business with plans to further cut Corporation Tax from 20% to 19% in 2017 and 18% by 2020.