Motability: 'an easy welfare win'

Tax break cuts and luxury car ban follow rightwing lobbying

- Rowena Mason Whitehall editor

A decade ago, Rachel Reeves was pictured with a disabled constituent congratulating him on being given the “keys to freedom” afforded by a Motability vehicle.

Since then, the chancellor has barely mentioned the scheme that leases 300,000 cars a year to people with mobility problems, aside from criticising Tory cuts affecting its users. Nor did it crop up in Labour’s manifesto, which promised to put disabled people’s “views and voices at the heart of all we do”.

But late last year, the idea that Motability was offering disabled people “free BMWs and Mercedes” became a repeated rightwing talking point fuelled by social media accounts on Elon Musk’s X. In fact, the cars are funded by people’s disability benefit payments, topped up with their own contributions.

From there, articles began to spring up in the tabloid press reproducing social media memes calling for Motability vehicles to be made more ugly, and the furore spread to the speeches of Kemi Badenoch and Nigel Farage - and finally to the attention of the Treasury.

At the budget, Reeves for the first time publicly identified the programme as a problem, saying it “was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz”.

Without prior consultation and with just a line of explanation in parliament, the scheme was the target of the only significant welfare cuts in the budget as £300m a year of tax breaks were slashed and premium brands removed by the scheme operator.

The plans involve imposing an insurance premium tax and charging VAT on advance payments for higher-value cars.