Chancellor Rachel Reeves could scrap three key benefits within the popular Motability scheme in November's Budget. The changes would reduce tax breaks and potentially remove luxury car manufacturers from the disability support programme.
Reeves said: "We can't leave welfare untouched" when asked about benefit system changes. She told Channel 4 News: "We can't get to the end of this parliamentary session and I've basically done nothing … We have to do reform in the right way and take people with us."
Specific changes planned
The potential cuts include eliminating VAT and Insurance Premium Tax exemptions for cars leased under the scheme. Luxury manufacturers like BMW and Mercedes could be removed entirely from the programme.
The Government is also considering tightening eligibility criteria for Motability cars. The scheme currently serves 815,000 people across the UK, including 80,000 users in Scotland.
Strong opposition from advocates
James Taylor from disability charity Scope warned the changes could "heap extra costs on to disabled people all over Britain". He said: "Motability is a cost-effective way for disabled people to be able to use adapted cars. Often these cars need to be able to accommodate equipment, carers, and disability related aids."
Taylor emphasised: "Life costs more if you are disabled. The government shouldn't be looking to ramp up costs on disabled people. They could leave more disabled people isolated, and less able to get into work."
Emma Vogelmann from Transport for All said: "As disabled people we often find public transport is unusable - broken pavements, nonexistent bus routes, and packed stations we can't navigate. A Motability car changes that - it allows us to work, shop, and do the school run."
Political criticism mounting
Labour MP Rachael Maskell, a strong critic of previous disability benefit cuts, called for proper consultation. She said the "government must adopt a process of co-production [involving disabled people] and then follow the evidence … Random top-slicing or cuts often cost more in the long run."
The Government previously faced an embarrassing U-turn over disability benefit cuts earlier this term.
Budget pressure context
The changes come as the Government faces a fiscal deficit of up to £50 billion. According to the Institute for Fiscal Studies, at least £22 billion is needed to restore fiscal headroom.
The Autumn Budget is scheduled for November 26, 2025. A Treasury spokesperson said: "We do not comment on speculation around changes to tax outside of fiscal events."
Sources used: "The Times", "Channel 4 News", "Birminghammail", "Chronicle Live", "Daily Record" Note: This article has been edited with the help of Artificial Intelligence.
