RAC director of insurance Mark Godfrey said: “After a recent double rise in Insurance Premium Tax, this further increase is a slap in the face for motorists who will surely see their premiums once again increase. It will mean three rises in two years and a more than doubling of IPT from 5% to 12% making Insurance Premium Tax the stealth tax of our time.
“Insurance premiums have already risen by over £100 compared to last year, and motorists have told us they are feeling the pinch, with 57% telling us that their premiums have increased over the past 12 months.
“We are also concerned that the Government’s whiplash reforms, while welcomed, will not achieve savings for motorists as only a small number of insurers have so far committed to passing the savings on.
“The Chancellor may now be at risk of encouraging some hard-pressed motorists to break the law by driving without car insurance, which will further increase premiums for law-abiding drivers. We would urge the Government in the name of road safety, to reconsider this rise.”