A recent study cautioned the Labour Party against reducing disability benefits, stating that the long-term social and economic advantages greatly exceed the immediate cost savings. Restricting assistance for millions of disabled people might hurt the economy and severely impoverish vulnerable households, experts warn.
Sir Keir Starmer, the leader of Labour, has said that his party would be “ruthless” with spending cuts if necessary in response to mounting pressure on the government to address rising welfare expenses. But according to economists and advocacy organizations, disability benefits are an important factor in determining social and economic well-being rather than only being a financial burden.
Disability Benefits as an Economic Asset
A report by Pro Bono Economics and anti-poverty organisation Z2K highlights the significant contribution of disability benefits to the UK economy. The analysis shows that the financial value of improved well-being among recipients, as outlined in Treasury guidance, is estimated at £42 billion annually. This figure surpasses the £28 billion cost of delivering the benefits, underscoring their broader value beyond direct financial support.
The report emphasises that these benefits help disabled individuals manage the additional costs they face daily, such as medical expenses, transportation, and energy bills. Matt Whittaker, CEO of Pro Bono Economics, described the payments as “a crucial financial support” that boosts mental health and life satisfaction while reducing poverty levels. Simplifying the claims process, the report suggests, could further amplify these benefits by removing barriers that prevent eligible individuals from accessing support.
Proposed Cuts Risk Deepening Poverty and Economic Loss
The prospect of cuts to disability benefits has sparked concerns among advocacy groups, particularly as eligibility criteria and assessment processes remain under review. Currently, 3.7 million working-age individuals receive health-related support, with numbers increasing since the COVID-19 pandemic. Any significant changes, such as stricter eligibility requirements for benefits like Personal Independence Payment (PIP), could leave hundreds of thousands without financial assistance.
Reducing benefits would disproportionately impact low-income households, many of which already find it difficult to pay for necessities like food and energy, cautioned Ayla Ozmen, Director of Policy and Campaigns at Z2K. She urged the government to reevaluate its strategy, saying that disability compensation should be viewed as an investment in economic growth rather than as a burden on public coffers.
While acknowledging the need for reform, the Department for Work and Pensions (DWP) is adamant that any adjustments strike a balance between providing strong assistance to people in need and being fair to taxpayers. Campaigners, however, contend that reducing welfare would negate its wider economic advantages, supporting the continuation or even expansion of disability assistance.
