The paper says that these tax breaks are worth around £1billion a year, and the measure will mean cutting an exemption which allows cars leased under the scheme to be exempt from VAT or insurance premium tax. BMWs, Mercedes and other luxury cars could also be removed from the scheme:
Around 860,000 disabled people use the scheme, which is open to people who claim a qualifying mobility allowance, usually through the Personal Independence Payment (PIP).
Removing the tax breaks would mean more claimants need to make an advance payment for their cars.
Under the scheme, claimants can exchange all or part of their mobility allowance for a vehicle but they most pay up front if the cost of a larger or more expensive vehicle exceeds it.
James Taylor of the charity Scope warned that scrapping tax breaks “could heap extra costs onto disabled people all over Britain.
"Restricting eligibility to Motability could hit disabled people on lower incomes hard.”
It is understood that no decision has been taken as Ms Reeves weighs her options ahead of next month's Budget.
Today, the Chancellor said she can't "leave welfare untouched" without hiking taxes and cutting spending on schools and hospitals.
The Government was forced into a retreat over botched disability benefit cuts by Labour MPs earlier this year.
But Work and Pensions Secretary Pat McFadden has signalled another attempt will be made to slash the welfare bill.
If this happens it will be a serious misstep for Labour. They are already suffering in the polls because of cuts to the winter fuel allowance, their failure to scrap the two-child benefit cut, cuts to incapacity benefit and other measures. Further cuts will just reinforce the perception of Starmer's party as Tory-lite.
It's getting a bit like a more mobile version of the bedroom tax.
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