{"id":86807,"date":"2025-10-18T08:02:58","date_gmt":"2025-10-18T07:02:58","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=86807"},"modified":"2025-10-18T08:02:58","modified_gmt":"2025-10-18T07:02:58","slug":"rachel-reeves-nasty-prejudice-is-coming-into-play","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/10\/18\/rachel-reeves-nasty-prejudice-is-coming-into-play\/","title":{"rendered":"Rachel Reeves’ nasty prejudice is coming into play"},"content":{"rendered":"

As the Guardian notes<\/a> this morning:<\/p>\n

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Rachel Reeves has said she \u201ccan\u2019t leave welfare untouched\u201d this parliament, with the Treasury understood to be considering axing up to \u00a31bn in tax breaks for a scheme providing cars for disabled people.<\/p>\n<\/blockquote>\n

They added this:<\/p>\n

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\u201cWe can\u2019t leave welfare untouched,\u201d she told Channel 4 News when asked about changes to the benefit system. \u201cWe can\u2019t get to the end of this parliamentary session and I\u2019ve basically done nothing \u2026 We have to do reform in the right way and take people with us.\u201d<\/p>\n<\/blockquote>\n

The Guardian then noted<\/p>\n

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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.<\/p>\n<\/blockquote>\n

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.<\/p>\n

That narrative needs to be challenged head-on.<\/p>\n

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 \u00a31.3 trillion government budget. But the signal it sends, which is that those already marginalised must \u201cshare the burden\u201d, is politically convenient for those unwilling to confront the real causes of the UK\u2019s malaise.<\/p>\n

Second, the idea that welfare must be \u201ctouched\u201d 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.<\/p>\n

Third, this announcement exposes the dishonesty of Labour\u2019s supposed fiscal prudence. Reeves insists that she must \u201cdo something\u201d 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<\/a> so that income from wealth, capital gains, and corporate profits are all appropriately taxed. Instead, she is proposing to go after disabled people\u2019s cars.<\/p>\n

Fourth, the language of \u201cdoing reform in the right way\u201d 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 \u00a31.5 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.<\/p>\n

The consequences of this kind of policy are clear:<\/p>\n