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Reeves Signals Welfare Shake-Up Ahead of Budget, With Motability Tax Perks Reportedly Under Review

The IFS says at least £22bn is needed to rebuild fiscal headroom under her rules.

Overview

  • Rachel Reeves said the welfare system "can’t be left untouched" in a Channel 4 News interview ahead of November’s fiscal statement.
  • Press reports say ministers are weighing removal of VAT and Insurance Premium Tax exemptions on Motability leases and dropping premium brands such as BMW and Mercedes from the scheme.
  • Disability charities including Scope and Transport for All warn the mooted changes would increase costs for disabled people and risk greater isolation.
  • Motability supports around 815,000 customers across the UK with vehicle leases that include insurance, servicing and breakdown cover.
  • The Treasury declined to comment on tax changes outside fiscal events, with any decisions expected at the 26 November Autumn Budget.