Chancellor Rachel Reeves has announced changes to the Motability scheme, which will see luxury cars such as BMW and Mercedes-Benz removed from the programme. The scheme, which provides subsidised vehicles to disabled drivers, will instead aim to source more British-built cars, with a target of 50% of vehicles coming from UK factories by 2035.
Motability Operations, the company that runs the scheme, said premium-brand cars will be removed immediately to focus on vehicles that meet disabled people's needs and represent value. The decision comes ahead of the budget on Wednesday, with Reeves stating the changes will support thousands of well-paid, skilled jobs.
The luxury cars made up only about 5% of the 800,000 Motability vehicles, and were available at no extra cost to taxpayers because disabled drivers paid more for them from their own pockets. Reeves had considered removing tax breaks for the scheme, but Disability Rights UK warned that charging VAT would add thousands of pounds to costs for disabled people.
The target of securing half of the cars from British factories could boost the UK car industry, with Nissan and Toyota already manufacturing in the UK. Mini, owned by BMW, could also benefit, potentially encouraging investment in electric vehicle production in Oxford. Motability Operations said the decision opens the door to new investment into UK car manufacturing.
Currently, the scheme leases about 300,000 vehicles a year. If it remains the same size, that would mean 150,000 British-built vehicles being leased in 2035, up from 22,000 last year. Nissan is expected to be one of the earliest beneficiaries, with the number of UK-built vehicles bought by Motability doubling.
