One of the great planks of Tory dogma was quietly, almost secretly buried last week when Kenneth Clarke and the Transport Secretary, Sir George Young, combined to ditch the Government's previously much-cherished roadbuilding programme. The years of telling us that roads are essential for economic prosperity are now history. The war fought by the Dongas tribe of Twyford Down, the tree people of Batheaston as well as by the stout Tory ladies of Staines near the M25 has been won. The national roadbuilding programme will now consist of a few dribs and drabs, the odd bypass or trunk road widening scheme.

It is a momentous event, yet it was deliberately hidden among all the other news of the Budget because it begs more questions than the Government at present is able to answer. Indeed, there was more than a touch of dishonesty about what happened on Budget day. The Chancellor, in his characteristic bluff way, spoke of an extra pounds 500m for roads under the Private Finance Initiative. Even yesterday, when the BBC Today programme described the money as a "paltry extra pounds 500m" for roads, the penny had still not dropped.

This is not extra money for roads - nor, as Sir George tried to depict it, just another way of bringing about the same level of roadbuilding. In fact, there has been a massive drop in the annual expenditure earmarked for national road schemes, from its peak of pounds 2bn last year to pounds 1.5bn, and we learnt in the Budget that it is to go on falling. But the more lasting effect, again revealed on Tuesday, is that under a review of the programme 117 schemes, some 60 per cent of the total, have either been permanently abandoned or put on hold. As a result, barely a handful of schemes will be started between now and the general election.

The roads lobby was appalled at both the decision and the way in which it was disguised, calling it the "worst day for Britain's infrastructure since the Romans left". They are also sceptical of the Private Finance Initiative's ability to deliver any roads quickly.

This is the sad end of the whole vision behind the roads programme, which was first set out in a rather thin White Paper called Roads to Prosperity in 1989. The gist of the argument then was that Britain needed "a major expansion of the Government's programme for building and improving inter- urban roads" to "meet the forecast needs of traffic into the next century". These were heady times for the roadbuilding industry, as it seemed that the Government genuinely believed it could build itself out of the traffic congestion crisis.

The problem was that there was never any hope of doing so. Traffic was expected to rise by between 142 per cent and 834 per cent between 1988 and 2025, and there was never any chance of increasing the capacity of Britain's roads by that amount. Money was being pumped into a programme that at best stopped things getting worse quicker. Finally, the Treasury said no more.

Tuesday's events had been presaged in March, when Sir George's predecessor, Brian Mawhinney, abandoned plans to turn parts of the M25 into a 14-lane megahighway. Once it was accepted that even the busiest stretch of motorway in Britain could not be widened because of the uproar from the largely Tory local people, the policy of massive roadbuilding had nowhere to go. As we predicted at the time in March, all the motorway widening schemes have now been scrapped.

But why didn't Sir George proudly boast about his new policy, rather than slipping it through as part of the Budget? Because in representing such a massive U-turn it was simply too embarrassing, and to boot because he is offering nothing it its stead.

He made a few token comments about making "more efficient use of the roads we have", but this would cost a lot of money too. This is something they have discovered in Japan, where the Government has spent pounds 120m creating a massive information system for Tokyo's roads. With a network of 13,000 sensors around the city to collect information on jams, and variable message screens on every street corner to relay the information, delays have been reduced by 8 per cent in the past 10 months. Soon drivers will be able to buy their own in-car screens to pick up the information themselves, and will be offered alternative routes with the aid of computerised maps.

Meanwhile, in Britain, we are waiting for the private sector to develop the infrastructure and pay for its installation, because the Government refuses to put in any seedcorn funding. Japan is already using technology to reduce congestion, while in Britain we are years away from even starting pilot schemes. This will be a great missed opportunity, since Japanese equipment manufacturers will be in a position to flood our market in the same way they have done with cameras and Walkmans.

The destruction of the roadbuilding programme in the Budget signifies that transport policy has been taken over by the Treasury. If Sir George wants to retain his credibility, he needs to wrest back the initiative. Earlier this year, Dr Mawhinney launched a transport debate which seemed genuinely to be asking the right questions about transport policy.

When Sir George publishes the results of the debate, which he has said he will do early next year, he must do more than reiterate platitudes about congestion and actually suggest radical ways of tackling the crisis. He must actually begin to make difficult choices which will antagonise a lot of people, for example by restricting car parking in towns, reducing speed limits or turning over road space to cyclists.

Now that few new roads are to be built, it is only through such courageous measures that the inexorable clogging up of our roads can be halted. There is no shortage of examples from abroad where all sorts of well-tried schemes, ranging from measures to increase bus usage to building light rail systems, are being implemented. Some of these are cheap, others cost a lot of money. Sir George must now let the Treasury have its way by stopping roadbuilding, but in return he has to persuade them to cough up for alternative transport policies that will stop the steady drift towards gridlock.