The government unexpectedly ditched its plans to reform personal injury claims.

The proposals, heralded in last year’s autumn statement by the then Chancellor, George Osborne, would have increased the limit for personal injury small claims from £1,000 to £5,000, and removed the right to claim compensation for low-value soft-tissue, or whiplash, injuries.

Osborne said they would cut car insurance by £50 a year and save insurers £1bn.

But ministers are understood to have told insurers they were not keen on the plans.

The Ministry of Justice reportedly does not want to proceed with the reforms at the moment, but rather to focus on prison reform. However, they have not been taken off the table entirely.

An MoJ spokesman said: ‘The number and cost of whiplash claims remains too high, increasing premiums for ordinary motorists. We remain committed to tackling this issue, and will set out our plans in due course.’