Drivers will save up to £150 million over the next ten years as the cost of getting a driving licence is slashed, Chief Secretary to the Treasury Danny Alexander and Transport Minister Claire Perry announced today.

Driving licence fees will fall by up to 32% as part of the government’s commitment to deliver savings to the taxpayer.

The changes, which follow a recent public consultation, come into force from 31 October 2014. Drivers applying online will see the fee for a provisional driving licence fall from £50 to £34 and online renewals after ten years fall from £20 to £14. The fee for driver tachograph cards – used by businesses to record how far their staff are driving – will fall from £38 to £32.

Chief Secretary to the Treasury, Danny Alexander said:

“Giving savings back to the taxpayer is a key element in this government’s drive for a stronger economy and a fairer society. That’s why we’re slashing the cost of getting a driving licence and giving it straight back to young people and businesses, saving £150 million over ten years.”

Transport Minister Claire Perry said:

“The cost of driving, especially for young drivers, can be significant and we are committed to cutting costs where we can. Thanks to DVLA making large scale savings to their running costs, we have been able to cut the cost of the driving licence which will save drivers and businesses £150 million over the next ten years.”

DVLA is reviewing all fees and the reduction in driving licence fees is a result of the first part of this ongoing review. Other fees being considered in the review include vehicle first registrations and duplicate registration certificates.

A million ‘first licence’ applications are processed every year and the fees drop will save new drivers £82.2 million over ten years. Over 77% of these applications are made by 17-24 year olds. In addition 2.1 million photocard licences are renewed every year and the changes will save motorists £61.3 million over a decade.

Businesses make another 85,500 renewals a year and will save £2.44 million over ten years while the cost savings to tachographs will save another £3.58 million over the decade.