Rachel Reeves could scrap luxury cars from Motability scheme used by 80,000 Scots
The Treasury is looking at axing subsidised luxury cars such as those made by Mercedes and BMW from the scheme in this month's Budget.
Chancellor Rachel Reeves is considering deep cuts to the Motability scheme which benefits 80,000 disabled drivers in Scotland, the Sunday Mail has learned.
In plans being drawn up ahead of this month’s Budget, the Treasury is looking at axing subsidised luxury cars such as those made by Mercedes and BMW from the scheme.
Reeves also wants to remove other elements of the taxpayer-backed leases handed to claimants such as insurance covering up to three drivers and breakdown cover and roadside assistance while abroad.
A Treasury source said: "This isn't about disabled people doing anything wrong – it’s about fixing a scheme that’s lost its focus.
“Every pound spent on luxury vehicles is a pound that could support the public services people rely on."
It comes as Reeves is reportedly eyeing up £1billion in cuts to Motability in this month’s Budget which could also include the end of VAT and insurance premium tax breaks.
Sources said the Chancellor remains totally committed to the scheme staying in place for people who need it most but that she’s worried about unfairness and value for money.
It’s understood any changes would not affect existing contracts.
The Motability scheme allows disabled people to access cars through the benefits system.
Some 80,000 people in Scotland currently have a Motability lease, including an estimated 4000 with high-end vehicles such as BMW or Mercedes.
The majority of cars paid for under the scheme are not adapted for disabled drivers.
Motability’s reserves have doubled to £4billion since the pandemic, mostly due to the value of leased vehicles.
Speculation has been growing Reeves wants to remove tax breaks for the Motability scheme, which allows people to exchange all or part of their enhanced mobility award from a qualifying disability benefit - primarily Personal Independence Payment (PIP) - for a lease on a car, powered wheelchair or mobility scooter.
Nobody using the Motability scheme gets a ‘free car’ and most of the 815,000 people in the UK with a current lease - including around 80,000 in Scotland - often have to make an additional up-front payment.
Motability recently issued advice to all users, offering reassurance that there has been no changes and should any be announced next month at the Autumn Budget, their prices will be protected for the duration of their lease.
A post on their website states: “You may have seen news stories about the possibility of tax changes to the Motability scheme. These reports are based on media speculation and not on any formal announcement.
“If you’re a customer on the scheme, your price is protected for the rest of your lease, and we’ll continue to deliver our all-inclusive leasing package as normal. We’ll keep you updated if there’s any news that affects you.
“Our focus remains the same: helping disabled people enjoy greater freedom and independence. Whether that’s getting to work, taking children to school, or simply going about everyday life, we’re here to support you.”