Transport Secretary Heidi Alexander has voiced her support for government plans to ban people on sickness benefits from leasing luxury cars under the taxpayer-funded Motability scheme.
The proposed reforms, driven by Chancellor Rachel Reeves, aim to “restore fairness” to the system by removing high-end models such as BMWs and Mercedes from the list of vehicles available to claimants.
Government seeks ‘value for money’ amid rising costs
Speaking to LBC, Alexander said she would be “comfortable” with ending access to “luxury models” through Motability, which helps people with disabilities lease cars using their benefit payments.
“The scheme provides vital support to people with genuine mobility needs,” she said. “But we also have to ensure it offers taxpayers value for money. If that means removing access to high-end cars like Mercedes or BMWs, then that’s something I would support.”
Her comments come amid growing scrutiny of the programme, which allows claimants of Personal Independence Payment (PIP) to use their higher-rate mobility allowance — currently worth £187.45 per week — to lease a new car.
Motability reforms to target ‘unfairness’
Under the scheme, the government sends payments directly to Motability, which in turn provides claimants with an all-inclusive vehicle package — covering insurance, servicing, and breakdown assistance.
The Treasury says the reforms will make the scheme “fairer and more focused,” with officials noting that only one in 10 cars leased through Motability are adapted for disabled users.
A Treasury source said: “The Chancellor is 100% committed to supporting those who need the scheme most, but the availability of premium vehicles goes far beyond providing essential mobility. It has turned into a subsidised premium motoring experience at the taxpayer’s expense.”
Taxpayer bill climbs as luxury models rise
Recent figures show that around 50,000 luxury cars, including BMWs, Mercedes-Benz and Audis, are currently leased through Motability — a number that has risen sharply in recent years alongside a surge in sickness benefit claims, particularly for mental health conditions.
In 2024, annual taxpayer transfers to Motability reached £3.1bn, a 10% increase on the previous year.
The government’s planned overhaul is expected to reduce access to top-tier cars and potentially limit some of the scheme’s additional benefits, such as free insurance for multiple drivers and extended breakdown cover.
Balancing support and fairness
Officials insist that reforms will not undermine the scheme’s core purpose — to help disabled people stay mobile and independent — but say changes are necessary to prevent misuse and ensure long-term sustainability.
Alexander’s backing makes her the first Cabinet minister to publicly endorse the reforms. “We need to make sure the scheme is there for those who truly need it,” she said.
