Dozens of leading disability charities have urged Rachel Reeves not to cut Motability at Wednesday’s Budget as the chancellor reportedly considers axing up to £1bn in tax breaks for the scheme.
Leasing around 300,000 vehicles a year to eligible disabled people, Motability has been the topic of intense debate in recent months as some politicians disagree about whether it is provides good value for the taxpayer.
The reported proposals would see cars leased through the scheme no longer exempt from VAT and insurance premium tax, meaning more claimants would need to make an advance payment for their cars.
In an open letter shared with The Independent, disability charity Transport for All and 41 other groups warn that the changes could have “dire consequences” as it would see disabled people “priced out of the scheme.” The proposals have left many with “high levels of uncertainty and anxiety”, they add.
The signatories, including Disability Rights UK, Guide Dogs, and Whizz Kids, argue that the changes could add £3,000 to even the cheapest Motability vehicles, despite the median household income of the average customer being £18,500 – half the UK average.
Estimates suggest that the changes could bring in around £1.2bn, however behavioural factors make this highly uncertain.
The charities also criticise misinformation that has circulated about the scheme, calling on the government to promote greater understanding of how it operates.
Motability has been around in some form since 1977, but has come under increased scrutiny in recent years due to a sudden spike in customers. The number of people with a Motability car has risen to by around 200,000 over two years, to 815,000.
The scheme enables people will serious disabilities to get a car by using a portion of their benefits to pay for a lease. It is open to people that claim a qualifying mobility allowance, most commonly through the Personal Independence Payment (PIP).
Following Labour’s disastrous U-turn on benefit cuts – which largely focused on PIP – earlier this year, the chancellor said in October that she “can’t leave welfare untouched” this parliament, with Motability understood to be in the Treasury’s sights.
On the eve of the Budget, Motability Operations, the company that runs the scheme, announced that it was removing premium-brand cars such as BMW and Mercedes as an option “immediately” to “focus on vehicles that meet disabled people’s needs and represent value and purpose”.
A minority of customers lease these vehicles, however, with the brands making up around 40,000, or 5 per cent, of the scheme’s cars.
Sophia Kleanthous, senior campaigns and public affairs officer for Transport for All said: “This Budget is about the sort of country we want to be. We should all have the freedom to make the journeys we want and need to, but public transport still shuts too many of us out.
“Cutting our only way to get around would betray disabled people and steal our independence. Does the Chancellor want to invest in equality or make life harder for disabled people?”
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