Driving theory test fees to fall
Currently learner drivers have to pay £31 to book a theory test. This would be reduced by £6 in October, with a further price drop of £2 planned for the same time next year.
It is estimated that the plans could save learner drivers over £100million over the next nine years.
Mr Hammond said: "We are determined to keep motoring costs down, so we want to make sure theory tests offer the best value for money while continuing to meet rigorous standards.
"The theory test plays a vital role in making sure that new drivers know the Highway Code and the rules of the road and today's announcement shows we are determined to provide cost-effective services that keep our roads among the safest in the world."
The plans have been outlined in a new consultation document - which can be viewed on gov.uk – with similar proposals put forward for motorcycle, bus and lorry theory tests.
Driver and Vehicle Standards Agency (DVSA) Chief Executive, Alastair Peoples, said: "By agreeing new contract arrangements for the delivery of theory tests we have secured significant cost savings, and it is right that we pass these savings on to our customers. We want to make sure that we continue to keep pace with customers' needs and deliver services in a way which is both convenient and cost effective."