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U.K. Plans Motorway Fuel-Comparison Signs to Reduce Costs

Oct. 23 (Bloomberg) -- The U.K. will try out the use of signs along motorways to tell drivers how much fuel costs at different gas stations in a bid to drive down prices as part of measures to cut motoring costs.

Justice Secretary Chris Grayling will also announce plans today to target so-called whiplash cheats, whose bogus compensation claims have helped to force up motor-insurance premiums. They will face new independent medical panels that will ensure only evidence from accredited professionals can be considered in settling claims.

“We are turning the tide on the compensation culture and helping hardworking people by tackling high insurance premiums and other motoring costs,” Grayling said in an e-mailed statement. “It’s not right that people who cheat the insurance system get away with it while forcing up the price for everyone else -- so we are now going after whiplash fraudsters and will keep on driving premiums down.”

Prime Minister David Cameron’s Conservative-led coalition is seeking to help voters stung by rising inflation and slowing pay growth as his Labour opponent, Ed Miliband, focuses his campaigning in the runup to the 2015 general election on what he calls “a cost-of-living crisis.”

Office for National Statistics figures released Oct. 16 showed that pay growth slowed to 0.7 percent in the three months through August, highlighting the pressure on living standards as inflation runs at 2.7 percent.

MOT Freeze

Other measures to be announced today include freezing the maximum price of the annual test of a car’s roadworthiness, known as an MOT, at 54.85 pounds ($89) until 2015. That could save 35 million drivers as much as 50 million pounds every year, according to Ministry of Justice figures. The government will also review charges for driving tests with a view to bringing them down.

The clampdown on fraudulent whiplash claims comes after statistics released by the Department for Work and Pensions showed that of the 824,489 motoring injuries in 2011-12, 542,922 were recorded as whiplash. The Association of British Insurers says 45,000 dishonest motor-insurance claims were detected in 2011.

According to the justice ministry, insurers say these claims cost them more than 2 billion pounds a year in payouts and lead to an average premium increase of 90 pounds for drivers. Each whiplash compensation payout costs an average of 2,400 pounds, with an additional 2,000 pounds in legal costs, insurers say.

Meanwhile, the House of Commons Transport Committee called on the government today to freeze the maximum penalty charge for parking offenses. ``There is a deep-rooted public perception that parking enforcement is used as a cash cow,'' the panel said in a report.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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