Luxury cars removed from Motability scheme ahead of budget

Luxury cars will no longer be available for Motabiltiy recipients, it has been announced, with the government saying more money will also go to British manufacturers under changes.

The announcement comes just days ahead of the budget, although it does not appear that the announcement will have any change to government finances.

Motability is a scheme whereby people getting personal independence payments (PIP) can sacrifice part of their benefits in exchange for a rental vehicle, if they are eligible.

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Motability vehicles are eligible for tax breaks, and the scheme has come under criticism for the notable increase in recipients without visible disabilities, alongside an increase in the volume of PIP recipients.

There has also been criticism of the luxury options available, which people can pay extra money for.

Proponents argue the scheme helps people get around and allows them to keep jobs and live more independently. The scheme also pays for adaptations to vehicles if people need them.

Tonight's announcement comes from Motability Operations, the charity which operates the scheme.

It says the aim is for 50% of vehicles leased through the scheme to be built in Britain by 2035, claiming it will support UK economic growth with a demand for 150,000 vehicles every year, with Jaguar and Land Rover not included.

However, luxury brands such as BMW and Mercedes will be removed as options, alongside the likes of Audi, Lexus, and Alfa Romeo, "immediately".

An announcement from Motability said: "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.

"The intention would be that 25% of cars on the scheme would be UK-built by 2030, up from 7% today."

Chancellor Rachel Reeves said: "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."

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The government is tonight refusing to say if it will change the Motability eligibility criteria in the budget, with any changes in this regard likely to come about as a result of the Timms review into PIP.

Earlier this year, the government tried to reduce the swelling PIP bill, but was defeated by its own backbenchers, launching a review chaired by minister Stephen Timms to look at the system.

Mr Timms said last month that "there will be no changes to the eligibility conditions for the mobility component of the personal independence payment" until his review finishes in a year's time.

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It is widely expected the government will increase welfare spending in the budget by scrapping the two-child benefit cap.

Taxes are also expected to rise, as the government wants to find more headroom and avoid cutting budgets.

(c) Sky News 2025: Luxury cars removed from Motability scheme ahead of budget