LAST Wednesday our economically illiterate Chancellor announced £5 billion worth of cuts to spending on disability benefits which the Department for Work and Pensions admits will drive at least 250,000 people, including 50,000 children, deeper into poverty.

In defending these killer cuts, Rachel Reeves arrogantly proclaimed: “I am absolutely certain that our reforms, instead of pushing people into poverty, are going to get people into work. And we know that if you move from welfare into work, you are much less likely to be in poverty.”

Reeves ignores the TUC research which reveals that non-disabled workers have higher pay on average to the tune of 17 per cent over disabled workers, which amounts to over £4,300 a year.

Besides this, disabled workers face much higher costs of living and that they “have to pay out an additional £1,010 a month to secure the same standard of living as a non-disabled person.”

On top of this, disabled workers are 30 per cent more likely to be on a zero-hours contract than non-disabled workers and face the widespread refusal of employers to make reasonable adjustments which cater for their disability.

Of course, Reeves who is a dedicated neoliberal, has no concern about the impact of her killer cuts on the lives of millions of disabled people. To Reeves we are so much jetsam and flotsam which needs to be swatted out of the way in her determination to protect the wealth of the billionaire class.

Any rational discussion of the economic value of disability benefits such as personal independence payment (PIP) reveals that they provide significant economic value in stimulating growth, reducing long-term costs to public services such as the NHS and supporting local businesses.

We need to examine key findings from Britain-focused studies over the last five years which are ignored by the “red Tories” in power and their mouthpieces in the right-wing presstitute media.

First of all, we need to acknowledge the multiplier effect and local economic stimulus provided by disability benefits.

In 2021 a New Economics Foundation (NEF) report estimated that for every £1 spent on disability benefits it generated between £1.70 and £2.10 in economic return through direct spending on food, housing and other indirect business activity.

The study further noted that cuts to disability benefits since 2010 had drained £2.6 billion annually from local economies, disproportionately harming deprived areas.

A Health Foundation analysis in 2022 found that disability benefits acted as economic stabilisers during the pandemic crisis. Households relying on disability benefits spent 95 per cent of their income locally, sustaining small businesses during that difficult time.

In the area where I live the local council, which covers a population of over 250,000, provides a money advice service to help people with benefit claims. It is estimated to have kept millions of pounds in our deprived area which have greatly helped local businesses and kept many in employment.

The second economic benefit of PIP and universal credit (UC), is helping keep millions of workers in employment.

In 2023 the disability charity Scope issued a research report which noted that the disability employment gap between disabled and non disabled workers to be 30.1 per cent, which costs the UK economy £45bn annually in lost GDP.

Closing this gap could boost tax revenues by £17bn and reduce welfare spending by £8bn. Yet Reeves is proposing cuts to non-means-tested benefits such as PIP which are essential to keeping over a million workers in employment.

Meanwhile, the Chancellor and the Labour government are planning to make cuts to Access To Work (AtW) grants. In February Minister for Disabilities Stephen Timms declared in the House of Commons that too many people are now claiming the Access To Work benefit which would need to be cut.

Yet in 2023 the National Audit Office (NAO) issued a report which stated that benefits like Access to Work yield a £1.73 return for every £1 invested. It further warned that poorly designed benefit assessments (eg PIP eligibility checks) cost the UK over £1.6bn in administrative fees over five years, while failing to address systemic barriers to employment for disabled people.

The third economic benefit of PIP and UC is related to poverty reduction and cost savings to public services such as the NHS. According to the Resolution Foundation, since 2010 real-terms cuts to disability benefits (eg, freezing PIP rates) have reduced support by £1,200 per year for the average recipient. This has increased reliance on NHS mental health services, costing £500 million annually.

In 2023 the Joseph Rowntree Foundation found that disability benefits lifted 1.2 million people out of poverty during 2021-22. Without them, the UK’s poverty rate would have risen by 3 percentage points.

Poverty-related costs (eg, NHS strain, homelessness etc) are estimated at £78bn annually while disability benefits help mitigate these costs.

The Trussell Trust in 2023 issued a warning that 62 per cent of working-age households using foodbanks include a disabled person. It stated that adequate disability benefits could reduce foodbank reliance, saving local authorities £320m annually in crisis support.

Disabled households faced a £1,200 higher cost-of-living burden in 2023 compared to non-disabled households due to energy and care expenses. The Disability Benefits Consortium issued a report which declared that 42 per cent of disabled people reported cutting back on food or heating to afford essentials, creating a “hidden recession” that stifles local economic demand.

Critics of disability benefits such as Reeves and Starmer keep arguing in the Tory press that disability spending is unsustainable, but evidence shows the opposite is true.

An Institute for Fiscal Studies analysis in 2023 revealed that disability benefits account for 2.5 per cent of total welfare spending £15.4bn a year, which is a fraction of the £44bn annual cost of economic inactivity linked to poor health.

The New Economic Foundation produced economic modelling in 2023 which noted that raising disability benefits by 20 per cent would cost £3.5bn but generate £7bn in economic gains through improved health and economic productivity.

Over the last five years British research consistently shows that disability spending is a net economic positive, driving local demand, reducing poverty-related costs, creates jobs for disabled people and improves the economic productivity of Britain.

Cuts since 2010 have been counterproductive and have caused hundreds if not thousands of unnecessary deaths. Meanwhile, targeted investment in Britain’s disability-inclusive tech sector, (eg, assistive devices) which is worth £12bn annually and employs 230,000 people, could generate billions in growth.

The “red Tory” government in power not only displays a profound immorality when it comes to cutting disability benefits but also an economic illiteracy of the highest order. As the Resolution Foundation notes: “Supporting disabled people isn’t just a moral duty — it’s an economic necessity.”

Dr Dylan Murphy is a member of Unite Community and Disabled People Against Cuts.