UK motorists have been hit by a small rise in car insurance bills after George Osborne announced a rise in insurance tax premiums in the first Budget of 2016.

Insurance premiums will rise by 0.5%, with the Chancellor stating that this will pay for extra flood defences, and 10% of your car insurance now goes in tax, up from 9.5%.

Osborne did, however, announce a price freeze on petrol and diesel duty for the sixth year in a row, and he expects this will save motorists £75 a year when compared with the pre-2010 fuel duty.

The Budget also saw an announcement made on the testing of driverless cars on Britain's motorways.

The announcement made clear the government's intention on supporting the growth of autonomous cars by stating they will be trialed as soon as next year.

Claims that the technology could represent a fundamental change to transport were made in Parliament, and the announcement is one of many that could put Britain into a position to lead the world in new technologies and infrastructure according to the Chancellor.

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There was no announcement on changes to VED or car tax during the Budget, although any alterations to Britain's annual tax system for cars will be made in April 2017.

Below is a list of the key announcements surrounding motoring made in the 2016 Budget:

  • Fuel duty has been frozen for sixth year in a row, saving the average UK driver £75 a year
  • Fuel prices are '18p a litre lower than under Labour' according to the Government
  • Insurance premium tax rises by 0.5% in order to pay for flood defences
  • 10% of your car insurance premium will now go in tax, up from 9.5%
  • Driverless cars will be tested on UK roads in 2017
  • Petrol price comparison boards to be trialed on M5 near Bristol
  • New tunnel road under Pennines from Sheffield to Manchester
  • £15m connected corridor from London to Dover for autonomous cars
  • Commitment made to expand M62 to four lanes with £161m investment
  • A66 and A69 to receive £75m upgrades
  • Tolls on the Severn crossing from England to Wales will be halved by 2018
  • £50m Pothole Action Fund for 2016-17
  • Company car tax will continue to be based on CO2 beyond 2021
  • £130m repair fund for roads/bridges that suffered damage by Storm Desmond and Eva
  • Businesses encouraged to buy low-emissions cars, and 100% First Year Allowance (FYA) extended to April 2021

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