The long-awaited Stonehenge tunnel and Arundel bypass have both been scrapped by new chancellor Rachel Reeves, as some £1 billion of “unfunded” transport pledges due next year are also put on the chopping block.

Delivering her maiden speech to the House of Commons, Reeves said the previous government “refused to cancel” the two major projects, which were expected to cost £1.7 billion and £455 million, “despite knowing full well they were unaffordable".

She added: "If we cannot afford it, we cannot do it.”

Reeves said transport secretary Louise Haigh would now undertake a “thorough review” of these transport commitments which cover projects from roads to rail.

No mention was made of the 14-mile Lower Thames Crossing, projected to cost £9bn, which was also expected to be scrapped.

The cuts were down to the new Labour government’s claim that it inherited a budget projected overspend of £22bn and action was needed to “meet our own fiscal targets”.

Reeves said: "This is not the statement I wanted to give today, and these are not the decisions I wanted to make, but they are the right decisions in difficult circumstances.”

As such, she promised that the Labour government’s approach would go against that of the previous Conservative government, which “made a series of promises on transport” without the ability to deliver them.

This, Reeves said, gave “false hope” to many with “promised roads that would never be built”. Those projects that did go ahead were “over budget and delayed and delayed”, she added.

“We will treat taxpayers’ money with respect by ensuring that every pound is well spent and we will interrogate every line of public spending to ensure it represents value for money.”

In addition, the Department for Transport could have its spending throttled as part of a multi-year spending review. Stricter departmental budgets will be set for at least three years, Reeves told the Commons. 

The value of these will be announced during the Autumn Budget on 30 October, when they will also come into effect.

“This is the most significant set of changes to our framework since the inception of the Office for Budget Responsibility,” Reeves said.

In response, RAC policy chief Simon Williams said the budget cuts have “created more questions than answers” about mending Britain’s roads.

“The cancellation of the A27 Arundel bypass, from which Labour promised to allocate £320m for pothole repairs in its election manifesto, simply doesn’t scratch the surface of the problem,” he added.