Currently reading: Budget 2018: what it means for motorists
Vehicle Excise Duty to fund £28.8 billion investment in English road upgrades; £420 million pothole repair budget
James Attwood, digital editor
3 mins read
27 October 2018

The Chancellor of the Exchequer, Philip Hammond, has delivered the UK Government's 2018 Budget, which contained plenty of interesting details for motorists.

The proposals unveiled in the House of Commons, includes £30 billion of investment in the English road network. 

Here's our rundown of everything in the 2018 Budget that related to motorists.

VED to fund £28.8 billion pot for motorway and major road upgrades

Philip Hammond has created a £28.8bn fund for Highways England to spend on upgrading and maintaining motorways and other major roads. The bulk of that cash will come from Vehicle Excise Duty (VED), which will be exclusively used for the scheme. It's the first time that road tax has been spent solely on the UK’s road network.

The majority of that money – £25.3 billion – will be spent on the Roads Investment Strategy 2, which was launched in draft form. The Budget report termed it "the largest ever investment in England's strategic roads." It said the investment would cover new major roads and large local major roads, citing the North Devlon Link Road as an example.

The spending will mark a 40% improvement on the £17.6bn the Treasury spent in the previous five-year investment cycle. That Roads Investment Strategy 1 scheme helped fund work on the A1(M), A66 Trans-Pennine route and the Oxford-Cambridge Expressway.

The investment plan was welcomed by Matthew Fell, the boss of the Confederation of British Industry, which represents UK companies. He said: “investing so significantly in our roads could help ease the all-too-real delays that people face just getting to work.”

VED will rise on April 1 2019 in line with the Retail Price Index (RPI). Hammond also said that the Treasury will review the impact of the new WLTP emissions test procedure on VED and company car tax, with a report due in the Spring.

Road repairs: £420 million to fix potholes and problems

Hammond has confirmed that he will distribute £420 million to councils to "fix potholes, bridge repairs and other minor works in this financial year." He had also earmkarked £150m for improving local road junctions and roundabouts.

Hammond said that every Member of Parliament "will testify potholes are high on the public's list of concerns."

The spending will be in addition to the existing £1.3bn highways maintenance budget and the previously announced pothole repair fund of £300 million.

Fuel duty frozen for ninth consecutive year

It was previously announced, but Hammond has confirmed that, for the ninth straight year, fuel duty would be frozen.

That means motorists will pay duty of 57.96 pence per litre for petrol, diesel, biodiesel and bioethanol fuel, 31.61 pence per litre for liquified petroleum gas (LPG), and 24.70 pence per litre for natural gas such as biogas.

Hammond said that government would maintain the difference in fuel duty between alternative and main fuel duty rates until 2032, in order "to support the de-carbonisaiton of the UK transport sector." That policy will be reviewed in 2024. 


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Hammond said the nine-year freeze has so far saved the average motorist more than £1000.

Transforming cities fund

The Government will extend its Transforming Cities Fund by a year to include 2022-23, with an extra £240 million investment for six metro mayors to spend on transport investments in their areas: £71.5 million for the West Midlands, £69.5 million for Greater Manchester, £38.5 million for Liverpool City Region, £23 million for West of England, £21 million for Cambridgeshire and Peterborough and £16.5 million for Tees Valley.

There will also be a further £440 million available to city regions shortlisted for competitive funding.

There is also a £90 million fund to establish ‘future mobility zones’ in three cities, where schemes such as self-driving vehicles can be tested. The Budget report said £20 million of this fund would be allocated to the West Midlands, but did not name the other two cities.

Electric motor technology encouraged

The Budget also includes the creation of a £1.1 billion Industrial Strategy Challenge Fund, which is designed to support development of technologies of the future. This includes up to £78 million to launch the 'Stephenson Challenge', which will support "innovation in electric motor technology, making vehicles lighter and more efficient than ever before."

Read more

Budget 2017: diesel tax hike confirmed

SMMT calls on Chancellor to aid car industry

Potholes: how much they cost the UK and how they are fixed

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28 October 2018

Your second para says the money will be spent in England and then goes on to speak about the UK. Which is it?

29 October 2018
cosmax wrote:

Your second para says the money will be spent in England and then goes on to speak about the UK. Which is it?

it can be and is both. The UK treasury makes decisions for a whole range of spending throughout the United Kingdom. In this case the story is about money being, or to be, spent on roads in England only. 

Happy to help.


29 October 2018
cosmax wrote:

Your second para says the money will be spent in England and then goes on to speak about the UK. Which is it?

I hope they spend it all in England.


28 October 2018

....given that it hasnt been called road Tax for years so that they van legitimately syphon this money off into whatever crazy plan they want to fritter money away into, this is a real killer headline.

What a novelty this would be....collecting 'road tax' and spending it on the roads!

28 October 2018

  Well, yes, at least there trying to be seen doing something about the state our Roads are in, and let’s face it, fixing Roads is a never ending task no matter who is in power, and they can never please everybody, we shall just have to wait and see how it pans out, the Roads are only one contentious area.

28 October 2018

As ever this funding is just a rehash of highway funding that has been announced every year for at least the past 5 years. There is no more money, just old money that has been through the wash.

28 October 2018

So VED will probably be going up then?

28 October 2018
So instead of delays caused by inadequate roads or dirt tracks masquerading as roads we will have endless delays due to new road building (planned to occur on all roads at the same time for maximum delays) and temporary lights while they drink tea thinking about doing a rubbish job filling potholes. Joy!


28 October 2018

where they invest millions in cameras is where the money will end up. They should invest in minimising disruption evening works so that you can travel north south East West faster than you could in 1985.

28 October 2018

On the M6 and M1, they've actually taken down all of the gantry mounted cameras with only the side mounted cameras every few miles. And in my anecdotal testing you really have to be driving way too fast to trigger them, I've gone through them at a bit over 80mph and have never been flashed.


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