As the Guardian notes this morning:
Rachel Reeves has said she “can't leave welfare untouched” this parliament, with the Treasury understood to be considering axing up to £1bn in tax breaks for a scheme providing cars for disabled people.
They added this:
“We can't leave welfare untouched,” she told Channel 4 News when asked about changes to the benefit system. “We can't get to the end of this parliamentary session and I've basically done nothing … We have to do reform in the right way and take people with us.”
The Guardian then noted
It is now understood to be considering removing tax breaks for the Motability scheme, under which disabled people are exempt from VAT and insurance premium tax on cars subsidised by the government.
So, we are in for another round of the austerity blame game, where it is suggested that the blame for what is wrong in the UK lies with the disabled, the poorest, and reckless librarians in Wolverhampton who have overstocked their shelves, as well as those profligate nurses on the night shift at your local hospital who have the temerity to expect to be paid for turning up to work whilst also having to pay at extortinate rates for carparking on site for the privilege of doing so.
That narrative needs to be challenged head-on.
First, this is not "reform in the right way." It is an attack on some of the most vulnerable people in society under the cover of fiscal responsibility. The notion that removing tax breaks for disabled people will meaningfully improve public finances is absurd. The total saving is trivial in the context of the £1.3 trillion government budget. But the signal it sends, which is that those already marginalised must “share the burden”, is politically convenient for those unwilling to confront the real causes of the UK's malaise.
Second, the idea that welfare must be “touched” at all reveals a deep ideological bias. The welfare state is not the problem: it is the lifeline keeping millions afloat after fifteen years of wage stagnation, housing crises, and crumbling public infrastructure. To attack it is to admit that the government has no vision for investment, productivity, or structural reform, but only a tired return to austerity logic.
Third, this announcement exposes the dishonesty of Labour's supposed fiscal prudence. Reeves insists that she must “do something” to prove her economic seriousness, but seriousness would mean addressing the vast subsidies flowing to the wealthy via tax breaks and to landlords, fossil fuel companies, oligoplist supermarkets whose staff have to rely on benefits as the wages they are paid are iunsufficent to live on, and, of course, our banks who contimue to reap the rewards for interest being paid on central bank reserve accounts wholly unnecessarily to the extent that it is. It would also mean reforming the tax system so that income from wealth, capital gains, and corporate profits are all appropriately taxed. Instead, she is proposing to go after disabled people's cars.
Fourth, the language of “doing reform in the right way” is Orwellian. Reform has become a euphemism for cuts. In this framing, the state is never too small to prop up private equity and offshore investors (like JLR, which recently received a £1.5 billion loan guarantee because its own management was incompetent at managing its risks), but always too generous to those who depend on it to live.
The consequences of this kind of policy are clear:
- It normalises the idea that welfare is a problem to be fixed rather than a cornerstone of a civilised society.
- It pushes disabled people further into isolation, stripping away mobility and dignity in the name of balancing the books.
- It shifts public anger away from corporate power, wealth concentration, and systemic underinvestment — and towards the people least responsible for any of them.
This is not about fiscal necessity; it is about political choice. Reeves' statement shows that Labour has chosen to continue the austerity narrative rather than challenge it. The choice to “touch welfare” is simultaneously a decision to leave wealth untouched.
A genuinely courageous government would say that social security is not a drain but a duty; that mobility for disabled citizens is not a privilege but a right; and that the real reform this country needs is of a tax system rigged in favour of the wealthy and corporations.
If Rachel Reeves wants to “take people with her,” she might start by standing with those people, and not by taking away their cars.
Taking further action
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here.
One word of warning, though: please ensure you have the correct MP. ChatGPT can get it wrong.
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These sort of cuts often end up costing us more. How many of these people rely on their car to get to work and may no longer able to work? And by removing their independence how many will require more help? Not to mention the impact on the mental health of an already marginalised group. What a nasty but of work Rachel Reeves is. This is not the change people voted for or the kind of society we want to become.
Entirely agreed
I wish I could upload a cartoon here, so I’ll have to describe it.
It was drawn by W(?). F. Horrabin in the 1920s.
Imagine a ladder standing in deep water with four men stand in line. The top person is a “£10,000 a year man” and standing high above the water level. The next man standing below him on the ladder was “a £1,000 a year man”. The next, with water up to his knees was a “£250 a year man”.The lowest man, straddling the legs of the man above, with the water up to his neck was an unemployed man. The top man is saying:
“Equality of sacrifice – that’s the big idea friends! Let’s all step down one rung.”
Indeed
The cartoon is reproduced here: https://chorltonhistory.blogspot.com/2019/03/equality-of-sacrifice.html
It’s pretty clear who RR wants to take with her, whose side she’s on. My boss in a previous job used a wheelchair, and he was in pain. It is possible, due to his limited mobility, that sitting all day in the chair, as there was no way/where to get out of it for a rest or change of position, was making things worse for him. He needed his adapted car to get to work, out on the edge of town, and of course for shopping, social life. He would have benefited from working shorter days, but even back then, that was a dream.
There are so many people, disabled or ill or not, who spend all their energy on work, who are exhausted and poor and who have no life outside work. Who work and need benefits. Others who cannot work. It is sickening to hear some people condemn others as scroungers. The welfare state should be better to truly be a pillar of our society, not being pruned.
Reeves does not believe in those people.
I do.
It’s a choice.
Frankly the fact that it has even been mooted is sickening and an indictment on Reeves’ policy making ability…I think most would already agree she has no clue on regard to economics.
My young sister was born with a medical condition that constrained her life in many ways. By the time she got into adulthood the one difference to at least some quality of life was the mobility allowance that enabled my mum to drive her to medical appointments, to enable her to get out and meet people, etc. Who would actually want to have their life constrained to that extent? And, RR thinks it is ok to even consider applying such a policy…what a sad, sad person she is. It makes my blood boil. Fortunately, my sister no longer has to worry about having mobility allowances being taken away…she is now in full-time care.
When RR could very easily apply more effective approaches such as reducing the interest payable to the CBRAs, taxing capital gains, investment income, etc., more fairly. Apart from anything else, it would make a significant and positive difference instead of saving pennies by heaping further misery on our members of society least able to withstand any further deterioration in their quality(?) of life.
As per previous comments on the blog, Labour had the chance with a significant majority (due to people being, literally, sick of the Tories) to turn away from years of Tory austerity and address the massive inequality created but, sadly, Labour seem to have completely lost what was the traditional Labour ideology and are, effectively, one and the same with the Tories. Consideration of this political choice in itself demonstrates how lost and damaged Labour are and how far they have strayed from their historical roots. I genuinely cannot understand why RR continues to be chancellor.
Me neither….
I did look at Motability BUT given our particular situation AND without taking into account the rules that apply to how the vehicle is supposed to be used the DLA (Mobility higher rate) would pay for and run a lot of quality used Kia’s.
Now if she was going to look at welfare what about
1. The ‘Two Child’ rule, and
2. The Benefits Cap,
3. A National Council Tax Benefit system, dont get me started!
OR…………..
Lets be really radical and look at some sort of ‘Cost Recovery’ from employers with large numbers of low paid employees. I have seen the figures but the sort of subsidy that each individual large supermarket gets was in the order of £30000 per month a few years ago so why isnt Rachel from Accounts asking for it back.
I suspect they hope to attract the Daily Mail vote.
They won’t, of course, so it is pointless.
We were warned, back before the 2024 election.
“We are not the party for people on benefits” said Rachel Reeves in 2015 repeated constantly except
during the brief aberration of the Corbyn years.
This article discusses the absence of welfare commitments in their 2024 manifesto.
https://www.benefitsandwork.co.uk/news/labour-party-election-manifesto-welfare-benefits-promises
Minister after minister has made it crystal clear in statements, speeches and interviews.
Perhaps some voted for Labour in 2024 hoping they didn’t mean it. Unfortunately, that was one of the few things Labour weren’t lying about. They did mean it. It will be horrible. More people will die. Labour don’t care.
2015 was also the time when Ed Miliband said that labour were the party against immigration. Labour party in general is unable to talk about it’s past. It can’t talk about Iraq. It can’t talk about 2008. They just hope we forget and vote labour because there is no alternative left of them.
They have already put in place cuts for those ill or disabled as part of Universal Credit.
The Bill freezing of the Limited Capability for Work and Work-Related Activities (also known as LCWRA) Element in Universal Credit was given Royal Assent, beginning of September. From April 2026, those sick or disabled, assume they are single (ignore Support with Housing Costs which in many case do NOT meet their market rents!!) will be frozen at £423.27 / month in addition to the Standard Allowance of £400.14 / month. Then, they may have to make some contributions from this to make up the shortfall of their market rent because the Local Housing Allowance (LHA) rate, i.e. the maximum eligible rent for the postcode area in which they live, is stuck behind market rents for those privately renting.
AND then, the same Bill cuts in HALF the LCWRA Element (spoken of in the Bill as the “Health Element” = one and the same). So it means that for those going through the Work Capability Assessment who are determined to be totally effective ‘unfit for work’, i.e. Limited Capability for Work and Work-Related Activities, and who still under current regulations do NOT have to undertake work-related activities (as these are a different category), will see this LCWRA fall to around £211 / month. So look at the ‘single, disabled, living in privately rented accommodation’ claimant, who will see their income fall drastically.
Now the government have made the case that they will increase the Standard Allowance further, but I can assure you that we are looking as significant poverty and destitution.
It is also true when people fall severely ill, as they have to also wait for 3 months (plus) in fact for the “Assessment Phase” of the WCA to be completed BEFORE they qualify for additional support. So all those already poor e.g. on Zero Hour contracts or those working without recourse to Statutory Sick Pay (and even that is a PITTANCE – £118.75 / week!!) fall immediately into severe destitution.
What can I say. I see it every day… it is only going to get worse. I cannot stand Rachel Reeves. When she opens her mouth, the tone of her voice, the way she speaks to deliver her non-sense, offensive statements to all these people… I have to switch off. I follow the developments but I cannot listen to her speak.
Thank you.
Very helpful.
And much to agree with.
Reeves attempted, successful, and future cuts on Welfare are abhorrent, self defeating, economically damaging. And, it does need to be said, such cuts are stupid.
OK, having said that, doubtless reform, and I mean reform not cuts, of welfare will be required sometime. But now is not the time when it is obvious that cuts are needed to the largesse bestowed on the wealthy in our society through tax break and other means.
Every system has I efficiencies and, yes, fraud. But these are tiny in the scale of things at the moment. The time may come, when the many other economic unfairnesses in our society have been addressed – but not now. When and if that time comes a sane and fair society would likely increase welfare spending, not cut it.
Until that time Reeves, and subsequent Chancellors, should keep her morally bankrupt and stupid hands off welfare.
I agree 100% with you Richard, and a great post as always.
These Labour front bench politicians strike me as nasty and deluded. Nasty because they are trying to “balance the books” on the backs of some of the most vulnerable people in society – disabled people who use the motability scheme. Deluded because (a) cuts to the scheme won’t save any money – the negative impact on disabled people’s mental health (and resulting reduction in employment rates and decrease in tax receipts, etc) will probably outweigh any short-term savings; (b) “balancing the books” is a fool’s errand anyway – as you’ve pointed out in previous posts.
We agreew Howard.
Althouygh I might quibble a bit with your new tax report….
There are higher end cars which only those with a decent income and someone on disability benefits can get. What they might note is that those cars may well be funded in part by family as well…
Aside from where it enables those to have adequate transport for work and other needs (e.g. a larger vehicle that a wheelchair will easily fit in, or costly bespoke adaptations), the Motability schemes also helps those who are themselves using up most of their disposable income as carers to provide unpaid support including regular transport assistance.
If the Treasury is considering… Does that mean the Chancellor has told them to, or that they thought it up themselves? I always thought civil servants did the hard work and guided those ministers who knew the policies people wanted but relied on civil servants to point out how they could, it couldn’t, work in practice. But what if civil servants (e.g. at the Treasury) don’t themselves understand how money works?
It appears they do not.
What I was aghast about with her little girly tete a tete with Ibra ‘don’t I look highly intelligent with the big glasses’ – wotserface over a glass of red wine was the statement “can’t leave welfare untouched”.
So, that’s it then? That was the summation of her intellectual justification? We must look as though we are being fairly unjust to everyone – was it?
It was a pure perception game Reeves was playing – not managing reality – perceptions only. And this is why we are heading at high speed into the societal breakdown buffer stops – by not dealing with reality.
She’s hopeless. And so are we.
I read this last night in a review of the papers and too say my blood was boiling would be an understatement.
I know someone who is relaint on this and they are in dismay. Again.
Make no mistake – they are chiselling away at everything and we will all suffer.
How can these people in goverment be so breathtakingly cruel? Its truly inhuman.
Agreed
Remind me – didn’t Reeves boast, ahead of the 2015 general election, that New Labour would be harder on benefit claiments than the Tories were ?
Nothing she does in that direction now should come as any suprise .
I take a slightly different view. I am appalled by the mean-spiritedness of this potential measure; I have a friend who is a beneficiary of the scheme and it has, in my view, literally been a life saver.
But I am also against the ever increasing list of tax breaks that are used to disguise what really needs to happen. So, if disabled people can’t afford to pay the VAT on a car then they should be given more money….. which can be spent on what they really need – it might be a car, it might be something else.
Similarly, for higher rate tax payers, we should get rid of the withdrawal of allowances and child benefit and just raise the top rate of tax.
In short, we should be open and honest about tax and benefits and proud of redistributing to those who are struggling.
My grandfather was always grumbling about tax (and, to be fair, it was at far higher rates in the 50s and 60s) but my father always told him “be thankful that God gave you the brains, strength and opportunity to make enough money to pay all this tax”. As I feel a grumble coming on as I fill out my tax return I always remember this.
I reflected this logic in the final chapters of the Taxing Wealth Report 2024
But their ‘donors’ bunged the Starmer faction. They are doing what they were paid to do to when they (probably illegally) took over the Labour Party.
So everyone – all the media all the BBC commentators – refer to cuts as ‘reform’ . Its the ministry of truth.
And the final sell out to the big builders – using ‘executive orders’ to ram through the wrecking the planning system, while not forcing those who have planning permission (1 million?) to actually build.
But I suppose it is quite funny – apparently polls suggest no one want cuts in the NHS, in social care or other services despite the relentless propaganda about migrants taking £600 taxi rides or Motability cars representing 30% of all new cars sold etc etc .
So she will probably try to produce a ‘soft’ cut to satisfy the Mail – but will have no alternative, within her own stupid rule, but to look at cutting tax freebies of the wealthy and other things you suggest Richard.
She will probably get the worst of both worlds – not enough public investment to get NHS off the ground, employ unemployed doctors, reduce waiting list significantly. And not enough public investment to boost the economy..
Seem the Labour Party is now taking up policy advise from neo liberal think tank and lobby group, Adam Smith Institute. Beloved by Margaret Thatcher, ASI emerged as a key intellectual force behind the privatisation of state-owned industries.
https://www.adamsmith.org/research/new-motability-vehicles-cost-more-than-the-entire-school-repairs-budgetspan
Why is it, and in this context I’m referring to voters in Scotland, that they are so easily fooled? On the doorsteps in 2015 we were told “Never again, we were lied to by the Labour Party”. And yet last year they again helped vote this shower of charlatans back into power. Did they really believe it would be “Change” for the better? And what do they think now, seeing the latest attack on some of the most vulnerable people in our society?
Your observation that welfare is a cornerstone of civilised society is borne out by our history.
The social welfare reforms introduced by the liberal Lloyd George brought into effect pensions and unemployment pay.They were meagre and modest payments but a welcome relief to some.
Keir Hardie established the Labour Party after organising food and monetary relief for striking Scottish miners.
It’s ironic that we now have a Keir,assisted by Reeves and others,who is intent on destroying those original values.
Most of the present cabinet would have felt comfortable serving in a Thatcher government.
Depressing.
“We can’t leave welfare untouched,”
“doing Reform in the right way”
Sounds like a Freudian slip.
I am afraid that I agree 100% that welfare reform is necessary, although I call it social security.
The initial reform has to be to analyse how much money a person needs to live on and base the social security levels on that figure, as always happened in the past, not on some arbitrary low figure that bears little relation to the actual cost of living. Individual circumstances are then applied to that base level to reach an appropriate payment for everyone in need.
Then consideration of additional needs, for example a family with school-age children needs additional help with school uniform costs, periodically. Plus additional help for unexpected circumstances – the fridge breaking down, for example.
There needs to be a sensible and timely uprating system, based on increased relevant costs, not the arbitrary inflation figure that was relevant 6 months before the increase.
Do all this (and it was done perfectly well in the 70’s) and you will achieve growth because the money available to those in receipt of social security benefits will spend it in the local economy.
There should be cuts – employers with large profit margins must be made to pay their workers appropriately, rather than those companies receiving state benefits because they pay their employees too little to live on. All state benefits that are not universal benefits should be withdrawn from the wealthy (to be defined), such as subsidised pension contributions and ISA interest.
That’s what I call reform.
Quite so. Much to agree with
I suggested on this blog a couple of weeks back that a hands-on model of part of the financial system could get to people who are not happy with maths or spreadsheets. Here is a draft of the sort of thing I had in mind:
A Hands-On Model of the Benefits System, UK.
This is a vertically mounted set of tubes. glass, all works transparent. Input is by water poured into a funnel at the top; there is a drain at the bottom. Water poured in at the top represents benefits paid; water drained at the bottom is net cost.
In the simplest case, water is poured in at top and goes straight through to bottom. Believed to be current govt model.
In real life, some of benefits goes directly back, through taxation. The proportion for poorest 10% is estimated at 48%, mostly VAT and council tax. This will be represented by a split in benefits stream; half will be diverted, to feed back eventually into “benefits”, which must therefore have a reservoir.
The nest diversion is in remaining 50% or so of benefits stream, where an appreciable fraction feeds back (via taxation of people who receive spending from benefits recipients) This maybe should involve 2 or 3 diversions, but will be rolled into 1 for simplicity. It would be nice to have this variable, with a meter showing how much goes back. Can read from 0 to 100%. This stream also goes back to reservoir going out to benefits. The reservoir has one-way valves for input from loops 4 and 6.
KEY.
1. Input of weighed water
2. Reservoir
3. Valve which can direct water to either of 2 branches, controlled by hand, with readout of proportion going to left branch.
4. Loop representing 50% tax returning to reservoir
5. Valve like 3
6. Loop representing total of tax returned via recipients of benefit spending
7. Receiver for unreturned water, to be weighed
8. And 9. One-way valves for returns to reservoir.
(It seems diagram hasn’t copied over. I’ll happily send it to anyone who wants to see it.
I like it
I wonder if AI could build an animation.
Anyone out there know how to do this?
Yer Tiz!
https://en.wikipedia.org/wiki/Phillips_Machine
https://www.sciencemuseum.org.uk/objects-and-stories/how-does-economy-work
In the mid 2000s I hung out with what was then a small group of cybernetics practitioners based at Manchester Business School called SCiO ‘Systems and Complexity in Organisations’. They were a really nice bunch of enthusiastic systems people and they have a website even now:
systemspractice.org
One of the members was a chap called Patrick Hoverstadt who wrote the book ‘The Fractal Organisation’ (2008) and much more. Anyhow, this group made the first attempt I’ve ever seen of developing a computer simulation of a system – it was an animation for sure and they were working on/developing such a model that could be used to visually convey complex interactions. I’m not sure of its broader applicability but it might be a start?
As I began to realise that my ‘org had no interest in systems thinking at all, I lost contact with the group. But they were some of the most interesting and open people I’d ever met.
Might be worth a try?
I can have a look to see wgere they are.
But I suspect I just need a youngish AI whizz.
An animation would be possible. Personally I’m not keen because animations can be convincing while dishonest/not transparent. But there are almost certainly many more people out there who could produce such an animation than people who could build even a crude hands-on model, so there is that practicality going for it.
Some years back one of my husband’s students produced a virtual-reality model of a French fortification, with flyover, as a student project for his final year. Perhaps this could be the way to get an animation produced? Are any of this blog’s readers university computer-science lecturers who could set such a project?
I’ve looked at the video of the Phillips machine, and my impression is that there a lot of economic assumptions built in. Savings are related to investment, for example. I may be wrong here. But it was certainly built in the era of fixed exchange rates/gold standards, and fiat currencies have changed alot of the old assumptions.
Much to agree with, including on exchange rates.
Where are the Freebie assessment tests for Labour politicians that’s what I’d like to hear about!
Its only tangentially related to this Reeves topic – but this ‘European Powell’ seems to be ploughing a lone furrow- about how ‘Free zones’ are undermining the whole governing system
https://europeanpowell.substack.com/p/uk-free-zones-are-the-most-underreported
They might
But this is seriously overstated as yet.
Husband sent this letter to our MP 3 days ago.
John Wallace
Wed 15 Oct, 13:51 (3 days ago)
to Paula, me
Hello Paula,
My wife Maggie is severely disabled with ME/CFS. The onset was sudden, after she contracted an unidentified virus in 1992. It was getting gradually worse, until she caught Covid, since when she has been almost bed-bound.
Her GP thought she would qualify for DLA so she applied. The assessment was clearly incompetent, the review was a rubber-stamp, so she requested a tribunal which she won. When DLA changed to PIP she had to reapply and we went through the same rigmarole until she was awarded PIP at another tribunal.
Earlier this year the government attempted to cut the “welfare bill” by, amongst other things, changing the criteria for PIP. This would probably have meant Maggie had to go through the same rigmarole again, except that the rules have changed and it’s much more difficult now to get a tribunal. This attempt, we recall, was defeated by a “backbench revolt”.
We now hear that the Secretary of State for Social Security and Disability is mounting another attempt to change the rules, only this time he will consult fewer people and those who are consulted will be bound by non-disclosure agreements. This kind of bullying is undemocratic. It disheartens Labour sympathisers like myself who are seeing this government as “Labour in name only”. I would appreciate it if you used any means at your disposal to oppose this.
If Keir Starmer and Rachel Reeves need some ideas on how to escape from the financial hole they were dropped into and are busy deepening, I suggest they look at Richard Murphy’s “Funding the Future” blog.
Regards,
your frustrated constituent,
John Wallace
Thank you
A good letter John… I may purlion elements of it for my own MP.
Being a merseysider also, I think I know who you have sent it to and according to this, she is on the your side… That being said, she may have been swayed at the rubicon moment in July.
https://www.bigissue.com/opinion/dwp-benefits-cuts-keir-starmer-paula-barker/
According to ChatGPT, apart from grandparents with dementia, there is no evidence that Rachel Reeves has ever had any kind of close association with any disabled people. Moreover, she has apparently never taken advice on disability issues from disabled people or from any organisations representing them.
Still, pretty impressive self-belief though, eh?
[…] An example of such a post, and the resulting poll, was this experimental post put up on YouTube yesterday, based upon my commentary on Rachel Reeves's budget plans, previously published here: […]
Honestly reeves should be ashamed of herself, always taking from the disabled. How would she like it if she was disabled and always trying to take from them. They have a hard enough life as it is. Of course there are people not needing the scheme but that should be down to the assessment system. Paying £300 a month is already alot of money but in many cases its needed for there freedom and life without this many are trapped. Reeves is alwsys against disabled but seems this is becoming highlighted now due to the amount of immigration we have and spending millions on this but now bullying disabled people. This country is so against people, I would swop my life with any normal person immediately, after 30 years of working a police officer and many jobs being struck down by a car left me disabled and unable to work. I get hardly anything in life and compared to when I worked and lost all my dignity with pip and trying and the life I now have. Everyone is so quick to judge, and like I said there are people ruining it for others but this is down to pip not anyone else and need better reviews ect. Unfortunately we’re not a reliable honest country now and seems many people are jealous of those in disabled ways who have motability vehicles are actually seemingly jealous, well maybe have a think how they are in life and try not to hate on those who need help. We cannot get work and get credit scores and loans and credit cards and also motability is a charity organisation for those to help and give a little bit of freedom in life, hardly alot to be fair is it. I would give anything to return to how I used to be and even more so like this feeling constantly shamed on by those people who think we’re all living a life of luxury when it costs us money still and down payments for a vehicle. Reeves is painting a bad picture to distract the truth like all politicians do, in actual fact the take home over 100k a year and live a life of no worries and find loop holes to pay taxes and what ever they can!!
Many thanks for sharing, Sean. I much appreciate you doing so. I will keep shouting for those in need, whatever the reason.
There was I thinking that those with the broadest shoulders should bear the greatest burden. I see no evidence of that from Reeves and her Treasury whatsoever. It feels like their advice is coming straight from Tufton Street and the City.