The Department for Work and Pensions (DWP) has announced a major change to the Motability Scheme, which helps people with disabilities parcel vehicles using their particular Personal Independence Payment (PIP).
Reports suggest the Autumn Budget will see luxury vehicles removed from the scheme “immediately,” affecting brands such as BMW, Mercedes, Audi, Lexus, and Alfa Romeo.
Changes to Luxury Options in the Motability Scheme
The government says the move is aimed at supporting British car manufacturers.
A Motability statement explained: “In the short term, Motability Operations will work closely with UK-based manufacturers to increase the share of British-built vehicles leased by customers, while maintaining affordability, choice and quality.
This includes doubling the number of Nissan British-built vehicles that the scheme leases to around 40,000.”
Motability added that the ultimate goal is for 25% of cars on the scheme to be UK-built by 2030, up from just 7% today.
Labour Party Chancellor Rachel Reeves defended the decision, saying: “Backing British car manufacturing will support thousands of well-paid, skilled jobs and is exactly the long-term investment our Modern Industrial Strategy delivers.
We are growing the economy to bring down debt, cut NHS waiting lists and cut the cost of living.”
The move, which includes dropping premium marques, has been reported to strengthen UK car manufacturing while keeping the scheme affordable for users.
Impact on PIP Vehicle Benefits
The change comes as part of a wider review of the PIP system, led by Labour cabinet minister Stephen Timms.
Concerns over rising welfare costs have prompted the review, although Mr Timms has assured the public that “there will be no changes to the eligibility conditions for the mobility component of the personal independence payment” until his report is completed next year.
In addition to the Motability shake-up, Ms Reeves is set to launch a new crackdown on benefit fraud in hereafter’s Budget.
At the same time, she’ll scrap the two-child limit for Universal Credit, a move anticipated to bring around £3 billion but attacked by numerous Labour MPs.
This is one of the most immediate and palpable changes to the Motability Scheme in recent times, signalling a shift in focus from luxury options to supporting domestic auto products, while balancing affordability for scheme users.
