Whiplash claims cost the country £2bn a year, an average of £90 per motor insurance policy. The Government said it intends to introduce measures to end the right to cash compensation for minor whiplash injuries, and will consult on the details in the New Year.

Mr Osborne said: “We’re going to bring forward reforms for the compensation culture around minor motor accident injuries. This will remove around £1 million from the cost of providing motor insurance. We expect the industry to pass on this saving so motorists see an average saving of £40-50 per year off their insurance bills.”

The Government added that this will “end the cycle in which responsible motorists pay higher premiums to cover false claims by others”.