The “shit-posting-to-policy pipeline” is a well-worn meme these days, but it keeps getting results. For some time now, certain X accounts have been documenting the excesses of the Motability scheme, where eligible welfare recipients can exchange certain benefits for access to a new vehicle. People have been granted free cars for everything from dyslexia and Tourette syndrome to constipation and alcohol misuse.

Facing a £50 billion black hole in the public purse — £28 billion more than she claimed the Tories left when she entered government — Chancellor Rachel Reeves is reportedly considering a £1 billion savings package that would involve changes to the Motability scheme. It costs the taxpayer approximately £2.8 billion annually.

One proposal under review includes removing VAT and insurance premium tax exemptions currently available to around 800,000 claimants, and the Chancellor is said to be assessing the range of vehicles offered too. The scheme includes around 900 models, some of which retail for over £50,000: among these are BMWs, Mercedes, and other premium brands, which are used by more than 40,000 claimants.

Access to Motability is “unlocked” through access to Universal Credit, a kind of “master key” benefit. In parts of Labour stronghold cities like Birmingham, London, and Bradford, over 50% of households claim Universal Credit. While this appears to signal a worklessness crisis, the Financial Times’ John Burn-Murdoch notes the figures often reflect benefit system rules more than actual health or employment trends. That sharp increase in applicants has boosted Motability’s customer base by roughly 200,000 in the past two years, reaching 815,000. Last year, the scheme was responsible for one in five cars sold across Britain.

So how did the scheme expand to the point where generosity is indistinguishable from abuse? The economist Mancur Olson’s “distributional coalitions” may give us an idea. In The Rise and Decline of Nations, Olson explores how individuals and organised interest groups collaborate to obtain narrowly focused advantages, frequently undermining the broader public good. As these groups multiply and champion redistributive policies, they contribute to economic stagnation and political gridlock — particularly in stable, pluralistic democracies.

In the case of Motability, the distributional coalition includes voters who rely on benefits as a key source of income, many of whom live in Labour constituencies. In Birmingham Ladywood, for example, where Home Secretary Shabana Mahmood holds her seat by a slim margin, 57.4% of the population receives welfare support. This creates a powerful alignment between claimants and the industry itself, which benefits from the increased and sustained demand from what is, in economic terms, a state-backed stimulus system.

Labour’s ability to tackle these distributional coalitions is limited. The proposed £1 billion saving falls short of the £1.5 billion lost via the backdown on PIP reform and it is just a tiny proportion of the savings they need. But Labour is also dealing with another coalition; the bond markets.

Ahead of the Budget, Reeves must make cuts in order to ease their concerns about runaway fiscal irresponsibility. Welfare spending has climbed to £296 billion, with Treasury projections indicating it will approach £380 billion by 2030. Incapacity and disability benefits alone are expected to surpass £69 billion by the 2028/2029 fiscal year. As the welfare system grows, so too does its influence; shutting off Motability claimants from buying Teslas may please online campaigners, but it is unlikely to get concerns about spending past the next Budget.

But given Reeves’s precarious position, it may be someone else’s problem by then.

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Tom Jones writes at The Potemkin Village Idiot.

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