In a significant overhaul announced just days before the budget, luxury vehicles will no longer be available through the Motability scheme. The move, confirmed by Motability Operations, the charity running the programme, aims to redirect support towards the British automotive industry.
What is Changing for Motability Recipients?
The scheme, which allows individuals receiving Personal Independence Payments (PIP) to exchange part of their welfare for a leased vehicle, will see brands like BMW, Mercedes, Jaguar, and Land Rover removed immediately. This decision follows criticism over the availability of high-end cars for people with non-visible disabilities and a notable increase in PIP recipients.
Proponents of Motability argue it is a vital service that helps people with disabilities maintain employment and live independently by providing mobility and funding for necessary vehicle adaptations. However, the presence of luxury options, which users could pay extra to access, had drawn political scrutiny.
A Boost for British Manufacturing
Alongside the removal of luxury marques, a new central goal has been set to bolster UK economic growth. The scheme now intends for 50% of all leased vehicles to be built in Britain by 2035. This ambitious target starts with an interim goal of 25% by 2030, a substantial jump from the current level of just 7%.
To kickstart this shift, Motability Operations will work closely with UK-based manufacturers. An immediate step will be to double the number of British-built Nissan vehicles leased through the scheme to around 40,000. This initiative is projected to create demand for approximately 150,000 vehicles annually.
Government Stance and Wider Context
Chancellor Rachel Reeves endorsed the move, stating it aligns with the government's Modern Industrial Strategy. "Backing British car manufacturing will support thousands of well-paid, skilled jobs," she said, linking the policy to broader economic goals like growing the economy and reducing NHS waiting lists.
The government has not confirmed if it will alter the Motability eligibility criteria in the upcoming budget. Any future changes to PIP are more likely to emerge from the ongoing Timms review, chaired by minister Stephen Timms. Mr Timms has explicitly stated that no changes to the mobility component of PIP will occur until his review concludes in a year's time.
This announcement comes against a backdrop of government efforts to manage the rising welfare bill, having previously been defeated by its own backbenchers on PIP reforms. The budget is widely expected to include other significant welfare changes, such as potentially scrapping the two-child benefit cap, alongside possible tax increases.
