A long-awaited legal framework to enable self-driving cars to be used on Britain’s roads was included in the King’s Speech.

The Government says its Automated Vehicles Bill will provide the sector with the certainty and confidence it needs to develop the technology in the UK.

It argues that the legislation will create one of the world’s most comprehensive set of laws for autonomous vehicles.

There have been concerns within the industry that the UK was falling behind other countries, such as the US, in terms of the extent to which self-driving technology can be used on public roads.

The Bill will aim to ensure there is clear legal liability over who or which organisation is responsible during crashes involving self-driving cars.

The Government says this will stop users being held accountable in situations where that would not be fair.

When the car is in self-driving mode, the company running the vehicle would be liable. Drivers retain the responsibility for non-driving aspects such as insurance and roadworthiness.

Downing Street denied that making the firm behind the self-driving technology liable would disincentivise manufacturers from investing in the UK.

The Prime Minister’s official spokesman told reporters: “No, we believe that’s a common-sense approach which both protects the consumers and ensures they’re not unfairly held accountable. Clearly, if a vehicle is driving itself it’s right that the company, rather than the individual, is responsible for the way it is driven.

“The non-driving responsibilities still remain with that person and we think that strikes the right balance and will be in line with the approach taken elsewhere.”

AA president Edmund King said: “The plans to introduce self-driving vehicles provide the opportunity for more efficient travel, but safety must be paramount when rolled out onto UK roads.

“Vehicle technology to improve road safety can be designed into cars more quickly, reducing the likelihood of crashes, the workload of the emergency services, and avoidable casualties.”

RAC head of policy Simon Williams said: “While the concept of truly driverless vehicles being commonplace on our roads might still be a little sci-fi to the average driver, there is no doubting the need for this Bill.

“The technology is moving at pace and it’s vital the UK isn’t left behind.

“However, if we’re ever to truly realise the benefits of autonomous technology we have to sort out the state of our roads once and for all.

“It’s hard to fathom how driverless cars will be able to safely navigate our streets when so many road markings are faded, and then there’s the prospect of vehicles getting needlessly damaged by the UK’s pothole plague as they surely won’t be programmed to avoid them.”

Tara Foley, UK and Ireland chief executive of insurer Axa, which has been heavily involved in automated vehicle trials, said: “AXA welcomes the Government’s commitment to support this exciting technological advance that offers multiple benefits for the UK economy, road safety and green jobs.

“As a large motor insurer, we have long been calling for this legislation to improve road safety.

“Introducing a regulatory framework for self-driving has huge potential to save lives.

“Research shows that 88% of road collisions involve an element of human error which would be eliminated with self-driving vehicles.

“There are also benefits for the wider economy. It’s estimated that the self-driving industry will be worth £42 billion and create up to 50,000 highly skilled jobs by 2035, and a legislative framework opens up opportunities for businesses to capitalise on this.

“For insurers, it also provides crucial clarity for establishing liability for self driving.”

Alex Kendall, co-founder and chief executive of self-driving technology company Wayve, said: “Today’s announcement that the Government will bring forward legislation for self-driving signals to the global self-driving industry that the UK Government is committed to fostering innovation for the future of transport.

“By setting out a clear path to commercialisation, new primary legislation for self-driving vehicles gives us the confidence to continue investing in R&D (research and development) and growing our talent base here in the UK.

“We look forward to continuing to work with the Government to cement the UK’s role as a global centre of excellence for self-driving technology that will make our roads safer and unlock new growth.”