Earlier this year, the Labour Government tried to cut £5bn in personal independence payments (PIP) from disabled people. Huge public revulsion and a backbench rebellion kiboshed that.
Ever since then, there has been a perpetual drumbeat of foot-stomping from key figures in and around Downing Street that they didn’t get their way. Chancellor Rachel Reeves said in October that the Government “can’t leave welfare untouched” in this parliament.
In 2016, the Labour opposition and similar public revulsion had forced an almost identical retreat from former chancellor George Osborne and former work and pensions secretary Iain Duncan Smith when they tried to cut £4.4bn from PIP. Duncan Smith resigned and Osborne only lasted a few more months after that.
Even worse for the bunkered down in Downing Street – they have faced a coordinated campaign to lift the two-child limit that has united children’s charities, the Government’s Children’s Commissioner and Labour opinion from New Labour chancellor Gordon Brown to left-wing former shadow chancellor John McDonnell. Both Reform and the Greens were also calling for the two-child limit to be scrapped.
So rather than cut £5bn from the social security bill, Reeves has been forced into spending an additional £3bn to tackle child poverty and homelessness.
And so in the Budget, the Motability scheme was targeted. This provides subsidised cars to lease for disabled people with mobility issues. It’s a vital part of social inclusion, in a world that excludes people with disabilities and costs them more to do the things that many of the rest of us take for granted.
The Budget red book says the lifting of the two-child limit “is funded by policies in this Budget, including reforming Motability tax reliefs and clamping down on fraud and error in the tax and benefits systems, including by increasing the number of face-to-face health assessments”.
This is classic divide-and-rule – lifting kids out of poverty, not by taxing the wealthiest (or “those with the broadest shoulders” to use Labour’s preferred lexicon) but by cutting benefits from disabled people and wheeling out the fraud bogeyman.
Rather than tackling stigma, Reeves reinforces it. Life on benefits is miserable. Rates of universal credit are low by both international standards and historical UK rates. Disabled people are more likely to live in poverty, more likely to use food banks, and despite the fabled largesse of our benefits system and the Motability scheme, the median household income of the average [Motability] customer is £18,500 – half the UK average.
What we don’t hear enough about is that many PIP claimants do work. It is a benefit paid to compensate for the additional daily costs of living with a disability, and PIP enables some people to work who could not otherwise. Those disabled people with the means to do so can top up the Motability subsidy with their own money and lease higher-end cars – like a BMW or Mercedes (only a small minority of disabled people do this).
In the Budget, the Chancellor banned premium brands and removed the exemption from VAT and insurance premium tax. So a scheme designed to promote social inclusion is now being limited. The subtext is barely a subtext: you can’t have nice things, and we’ll tax you for receiving a benefit.
There is a defensible policy for ending some high-end brands, which hasn’t been fully articulated because the Government is so keen to look tough on welfare. This is a government-funded scheme, and it would be perfectly legitimate to say that only cars manufactured in the UK are eligible. We make everything from Nissans and Toyotas to Jaguars and Range Rovers in this country.
This would be part of a coordinated industrial strategy to use a government scheme to create and sustain UK jobs, linked to Labour’s long-lost “growth mission”. It would be a practical policy to boost UK industry, supply chains and tax revenues, rather than awful inauthentic sloganeering like “patriotic national renewal”, flag-adorned backdrops and divisive malice about social security.
Part of the reforms to Motability includes the discontinuation of the “inclusion of overseas breakdown cover and reduce their lease mileage limit”. But why shouldn’t disabled people be able to take their car on holiday (it’s almost impossible to hire an adapted car). And given public transport is inaccessible to some disabled people, of course, they might use greater mileage in their cars. What might be a walkable journey to the shops or the school run is not for many disabled people.
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It is yet another symptom of a Cabinet that got into power without any real plan for government and which has been thrashing about wildly ever since. As a result, they have been forced into frequent retreats whenever their haphazard policies meet resistance.
This has alienated section after section of Labour voters and the wider public – as is evident from Labour’s dire poll ratings and the unprecedentedly bad personal ratings for both Starmer and Reeves.
Attacking the Motability scheme is another misstep from this Government.
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