Young drivers facing the mounting costs of taking to the road might well breathe a little easier after the Government announced it was slashing the cost of obtaining a licence.

The cost-cutting measure, which will see the price of a provisional licence fall to £34 from £50, was announced today by ministers, who estimated it would save all new drivers in the region of £80m over the next decade.

Other cuts coming into effect on October 31 include the costs of renewing a licence online every 10 years, reduced from £20 to £14, and a tachograph card used by businesses to monitor how far staff drive, which will fall from £38 to £32.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 10 years.”

The agency processes one million “first licence” applications every year and the fees drop is expected to save new drivers £82.2 million over 10 years, with more than 77% of these applications are made by 17 to 24 year olds.

In addition 2.1 million photocard licences are renewed every year, meaning motorists already on the road would save £61.3 million collectively over a decade.

Businesses make another 85,500 renewals a year and will save £2.44 million over 10 years while the cost savings to tachographs will save another £3.58 million over the decade.

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 10 years.”

The DVLA is carrying out a review of all fees and other cuts being considered include vehicle first registrations and duplicate registration certificates.

It comes after a report by AA Index this week revealed motorists are seeing the cost of taking out car insurance increase for the first time in more than two years.

Professor Stephen Glaister, director of the RAC Foundation, said: “The Department for Transport’s own surveys show the three things that do most to put young people off driving are cost, cost and cost: of learning, of insurance and of buying a car.

“Incomes for teenagers have been under downward pressure at the same time as motoring costs have generally been rising. This move is welcome.”