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Home Business Economy

Labour welfare cuts: bad for people, the party and the public purse

Labour’s planned cuts to disability benefits have been rightly condemned for targeting the vulnerable, but they’re also economic nonsense

Jennie Kermode by Jennie Kermode
26-03-2025 17:06 - Updated on 08-09-2025 11:49
in Economy, Health, Politics
Reading Time: 8 mins read
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Close up of person in a wheelchair, with red shoes

Photo by Jon Tyson on Unsplash

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There is, it would seem, a confusion at the heart of government between the ability to make hard decisions and the ability to make decisions well. Not that taking money away from the most vulnerable people in society is really a hard decision – it’s a cruel decision, but it doesn’t require toughness of the sort needed to tax wealthy people who might withdraw their party donations and personal gifts as a result. What it does require is a measure of stupidity. That’s because, far from saving the country money, it’s a false economy that we will all pay dearly for.

Let’s look at what depriving disabled people of money does – beyond making it harder for them to do things like eating, keeping clean and staying alive. When they have money, what do they do with it? A few save up for equipment to help them cope or for more accessible accommodation, but with 27% living in poverty, most can’t afford to do that, so they spend their money. This provides economic stimulus, which is exactly what the country needs.

By contrast, wealthy people tend to hoard money or keep it in offshore trusts where it contributes nothing to keeping the economy moving.

Disabled people contribute to the economy

What do disabled people spend their money on? They tend to buy day-to-day necessities locally, helping to support the small retailers which are the cornerstones of our communities. They buy assistive equipment which keeps a whole industry going, and they also, in many cases, pay for personal care (proportionately little of which is provided by the state). In England alone, the care sector employs 1.59 million people. What will happen to these people when those in need can no longer afford to employ them?

In the absence of professional care, people who have been dependent on it do one of three things. They become more severely ill, deceasing their productivity if they are among the 53% in work, and making it less likely that they they will recover enough to return to the world of work otherwise. Some just die.

Those who do neither don’t magically get better – instead, they depend on friends and family members to step in. In other words, the care burden doesn’t disappear, it moves elsewhere and stops contributing to the economy. As a result, those friends and family members become exhausted, their own productivity at work decreases, and they become more likely to end up disabled themselves.

Access to transport

There’s another thing that disability benefits pay for, and that’s transport. Disabled people on the high mobility rate of PIP (personal independence payment) have the option of swapping that part of their benefit for access to the Motability scheme, which then provides them with the use of an electric wheelchair or a car. Without this, many would be quite unable to get to work.

There are not presently enough work-from-home jobs to go around, especially with senior politicians actively discouraging employers from providing them, and there’s little support for those who don’t have the skills to do them – so without PIP, many people who are currently paying taxes will find themselves unemployed.

Pushing disabled people into dependence

Perhaps realising that the public is alert to some of these problems, the government is trying to work around it by creating the impression that it won’t take money from really disabled people, only those whose difficulties are imaginary, who are malingerers, or who are young and therefore really ought to settle for remaining in their parents’ care for a few more years. So, let’s look at those groups.

Here’s the thing: when you’re disabled, whatever type of disability you have, there will always be jobs you can’t do, so it’s vital to have a good education and the qualifications needed to access others. Stripping support from young people will in many cases make this impossible, leaving them at high risk of a lifetime of dependency.

It will also leave them isolated from their peers at a stage when people are forming romantic relationships and lifelong friendships, so they’re more likely to be alone in later life, after their parents die or become incapable of looking after them, and again, the state will have to do more for them then.

Two women seated in a park, one on a bench, the other in a wheelchair
Health

Supported as a child, abandoned as an adult

by Jennie Kermode
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Having long Covid is not malingering

On to the malingerers. We all know who these accusations refer to, even when it’s not said out loud. Ongoing mismanagement of Covid-19 (which was, to be fair, aided and abetted by the disastrous policies of Donald Trump in the US and Jair Bolsonaro in Brazil) has left as many as one in ten UK citizens with lasting health problems. Some are too ill to cope without support, and that’s a real economic problem. But it’s not one that can be solved by forcing people into work.

We don’t yet know what the long-term prognosis for these people is, but we do know that those who recover fastest do so by getting plenty of rest. That’s because long Covid is a mitochondrial disease – it damages the tiny engines inside each of our cells that provide them with power. They need time to heal, and trying to force people to work through that is like trying to force someone to walk on broken legs while insisting they’ll get better at it with practice.

Supporting long Covid victims to rest is, simply, the only way we’re going to reduce their support requirements in the long term.

Mental health needs stability and support

So, let’s look at the remaining group, because we know who’s being referred to there too: people with mental illnesses. These, too, are easy to stigmatise for the simple reason that they’re hard to see. But that doesn’t make them less real.

Relatively few people in this group need benefits like PIP throughout their lives. The majority of such illnesses last for just a few months or years, responding well to drug treatment or counselling. Unfortunately, counselling is in short supply just now – due to over a decade of chronic underfunding – and many people’s illnesses become more severe just because it takes them so long to get an expert diagnosis, never mind practical help.

So, they are already struggling, through no fault of their own. Then they are confronted with the threat of being denied financial help – is that supposed to make them feel better? What they need is stability and a reduction in day-to-day pressure. Investing in this means, again, that they will have less need for state support in the long term.

The key is investment, not cuts

There’s that word: investment. It’s critical to reducing long-term economic strain and bolstering the health of the population, but it’s a concept that this government, like its predecessor, seems unfamiliar with.

Perhaps that’s what we should expect of a chancellor who seems to have bluffed her way through life by continually exaggerating her skills and experience. Her new policy of austerity could not be more transparently ideological. Today’s announcement that she plans to review existing PIP awards just adds to the damage – PIP reviews, carried out at maximum five-yearly intervals, are already highly costly and are pointless in many cases, such as when people have progressive, incurable conditions or missing limbs. No evidence has been produced to provide a rationale for cutting welfare. It’s no wonder that so many of her backbench colleagues are appalled by it, nor that ordinary members have started leaving the Labour Party in droves.

If the planned cuts go ahead, they will be a nightmare for disabled people. They will also seriously wound the Labour Party, undermining its core vote. And they will do serious, lasting damage to our struggling economy – something that none of us can afford.

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Tags: Labour

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Jennie Kermode

Jennie Kermode

Jennie Kermode is an author and journalist based in Paisley who specialises in LGBTQ issues and film. Her work has appeared in the likes of New Internationalist, the New Statesman and the Independent, she is a commissioning editor at Eye For Film and her most recent book is Growing Older as a Trans and/or Non-Binary Person. Follow Jennie on Bluesky

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