RACHEL Reeves will take an axe to the Motability scheme as she tries to cut the bloated welfare bill.
She will stop posh cars such as BMWs and Mercedes being provided under the taxpayer-funded programme, we can reveal.
Ministers want to put the brakes on extras such as overseas breakdown cover and insurance for up to three named drivers.
And they are looking at cutting tax breaks such as the VAT exemption.
Motability was meant to help profoundly disabled people but it has ballooned into a £7billion industry exploited by scammers.
A Treasury source said Ms Reeves was determined to tackle the “unfairness”.
They added: “The Chancellor is worried the Motability scheme has lost its focus on its original purpose — helping disabled people get the mobility they need, and is now offering high-end packages. She has asked how the scheme can be made fairer and fit for purpose.”
It comes after Reform MP Lee Anderson called for a return of blue three-wheelers once available on the NHS for the disabled.
Government figures show 50,000 cars paid for under Motability were luxury vehicles.
Most cars had no disability adaptations.
Ministers are looking at tightening eligibility criteria but that is not expected until late next year.
And a review by Sir Stephen Timms has ruled out any savings to Personal Independence Payments.
It comes after Ms Reeves first attempt to cut welfare ended in an embarrassing £5billion U-turn.
But she is unlikely to get rid of the two-child benefit cap, despite the demands of leftie backbenchers.
Shadow Chancellor Mel Stride writes in today’s Sun on Sunday: “When Labour runs out of cash, the same trick always follows — pass the hat round and make the taxpayer cough up.”
