"Sweating the Assets": Labour's War on the Disabled

In September of last year, Keir Starmer reassured The Observer that his government was not “going down the road of austerity”. Now the chancellor has announced in the Spring Statement cuts amounting to several billions of pounds to Personal Independence Payments (PIP) and the disability-related part of Universal Credit (UC). These cuts are estimated to affect millions of families in the UK who currently receive some form of disability benefit and could for some people amount to losing around £9,000 a year. The changes to the assessment process for these benefits are expected to affect those with physical disabilities such as back pain, arthritis, and cardiovascular diseases and mental disabilities like anxiety and depression the hardest. Criticism of this policy has been widespread, including from the ruling party’s own back benches. Many Labour figures are bewildered that they have taken the policy of their rivals, the Conservative and Liberal Democratic parties, and not only maintained it despite its widely-felt disastrous consequences, but actually deepened it.

So why are they doing this? Is it because, as their critics say, they are “cruel”? Or is it the case, as the government says, that they have no choice and are doing what needs to be done to “balance the books”? In a way, both are saying something true, although they are missing the wider context of the underlying decline of the entire capitalist system that is pushing them to make increasingly barbaric choices.

Austerity was the flagship policy of the Conservative-Liberal Democratic coalition that came to power in the wake of the bursting of the speculative bubble known as the 2008 global financial crash. In order to protect the country’s financial industry from losses, the government bought up massive amounts of failing financial assets (or debt to you and me). The other side to this largesse for bankers were massive cuts to public services, principally benefits, education and early years care, and the National Health Service. Various studies have been carried out to assess the impact of austerity. They have found variously that austerity was responsible for thousands of deaths and falls in life expectancy. The NHS has been particularly stretched thin. There have been various failings at multiple hospital trusts all occurring in an environment of extreme staff sickness and turnover. When the coronavirus pandemic hit, the UK was uniquely poorly placed to respond. An emaciated state struggled to respond and thousands died while profits for private contractors piled up. Throughout the pandemic the UK had a consistently higher death rate than other European countries. And while all countries experienced massive increases in the percentages of people unable to work due to long-term illnesses during the pandemic, the UK has been unique in not seeing that figure gradually fall since.

The increase in the economically inactive part of the population due to long-term sickness has really been worrying the British ruling class. Rachel Reeves has specifically stated that she wants “a serious plan to get the long-term sick (…) back to work”. In contrast to unemployed people who are defined as “actively searching for a job” (i.e. having applied for a job in the last fortnight), economically inactive people are those adults who are not planning on being in employment in the near term. This includes pensioners, students, and stay-at-home parents (mostly mothers), as well as those who are unable to work due to disability and those who would prefer to work rather than have to rely on UC, but have given up searching due to lack of options. Whereas the unemployment rate generally oscillates around 4% of the adult population of the UK (about 1.5 million people), the percentage of economically inactive people is around 22% (about 9.2 million people). Of that group nearly a third (about 2.7 million) have long-term illnesses, a figure which has grown by 700,000 since the pandemic.

These economically inactive people are considered to weigh negatively on the UK’s productivity figures, which have stagnated since 2008 and are falling behind the other G7 nations.⁽¹⁾ This fear of slipping behind other nations is behind the British government’s hope that by being “ruthless” and “getting people back to work” it can fix the UK’s famous “productivity puzzle”. While capitalists may not accept that labour is the source of all value, they can easily appreciate that forcing workers to accept worse and worse working conditions gives them a more compliant labour force from which they can profit more.

The reality is that this method of offsetting the fall in the rate of profit by increasing the exploitation of labour may not be open to them. Workers in Britain are certainly not over remunerated. Wages have been stagnant for decades. And all the evidence points to the fact that overwork may already be the source of the productivity issues. Days lost to work-related illness are high. Worsening working conditions, and forcing people who already have workplace injuries back into work is only likely to make this worse.

Another spanner in the works is that there are no jobs for people to go back to. Job vacancies are low and the UK economy is teetering above the recession range. Labour's plan is banking on their reforms (not only to welfare, but to planning and financial regulations as well) “kickstarting” growth. An insider described the party’s justification for the cuts as “it will be tough in the early years but we'll eventually reap the benefits”. This doesn’t seem likely as the reforms planned are the same old economic orthodoxy espoused by governments since the 1970s. Labour's plans are for more privatisation, more handouts to private companies and relaxations of financial regulation.

The changes to financial regulations are intended to incentivise investment and include: promoting pension fund consolidation, giving the Financial Services Authority head a “growth focused mandate” (i.e. turning a blind eye to risky behaviour) and using a new National Wealth Fund to “crowd-in” investment from the private sector for industries such as energy and technology. What these amount to together is a retrenchment of the doctrine of “public risk and private benefit” that has characterised this most recent period of capitalism. In fact the chancellor recently met with executives from global investment firms and acquiesced to their demands for tax cuts.⁽²⁾ This is part of a pattern of close relationships with financial giants such as Blackrock which are seen as essential for investment in the UK in sectors such as energy and technology.⁽³⁾ This is despite the atrocious history of involving private finance in providing public services, such as the construction and maintenance of schools and hospitals, that has taken on increasingly predatory forms.⁽⁴⁾

The situation of the NHS is the most dire. For starters, its infrastructure is literally crumbling, there is “a maintenance backlog of more than £11.6bn”. There are incredible backlogs for community care and mental health referrals. In hospitals, roughly 1 in 10 patients are waiting for more than 12 hours for A&E treatment. These backlogs in seeing patients “have contributed to an additional 14,000 deaths a year according to the Royal College of Emergency Medicine”. This is a situation which is made worse by low pay and overwork. Poor pay means hospital administrators struggle to fill posts within the service, this means the remaining staff are overworked, and they are likely to have to take more time off to recover. An inquest carried out into the state of the NHS discovered that one working month per year was lost to sickness for every NHS nurse and midwife. The inquest’s author stated that working conditions must improve “not only to improve staff morale but productivity.“⁽⁵⁾

To bring down waiting times and fill staff shortages in the NHS would likely require extra investments of billions of pounds a year. However, the Labour Health Secretary has stated that there will be “no cash without reform”. It’s more likely that there will be “no cash, just reforms” and that these reforms will happen to benefit the very same business interests that fund the Labour Party. Listed in their publicly available registers of funding are healthcare lobbyists, private sector recruitment agencies, and private equity bosses with large holdings in healthcare companies. John Armitage, a hedge fund manager who has given the health secretary almost £100,000, happens to hold almost $500m in shares of United Healthcare, the US healthcare giant that was in the news earlier this year after its CEO was gunned down in downtown New York by a vigilante angered by the lengths the company goes to deny healthcare to its customers.⁽⁶⁾ Another friend of the party is the deputy head of a group representing capitalists in the European health care sector, who told the Financial Times:

Everyone agrees that the Labour party is better on health; they are the only one trusted to implement reforms and work intelligently with the independent sector. Everything I’m hearing is that they will kick-start private sector investment much more proactively than the Tories were able to do⁽⁷⁾

The sadly inevitable end-point of privatisation in the NHS can be glimpsed in British residential care homes which have already been largely sold to the private sector. Since privatisation, staffing levels and service quality have dropped as pay for the carers has been kept as low as possible. A large proportion of workers in the sector are recent immigrants who are subject to abuse and disrespect from their employers. Across the wider social care system almost a quarter of workers are on zero-hours contracts, and many are paid below the minimum wage due to employers defining travel time between jobs as workers’ personal time. Staff turnover in the care sector is accordingly very high. Despite providing poor services and being in massive amounts of debt, many care home chains continue to hand out dividends to their private equity investors. It is estimated that at least 10% of the money in the care industry is extracted as profit.⁽⁸⁾ Yet it is precisely this failed model that Labour believes can save the rest of the NHS, despite all the evidence that this system of private funding hollows out any industry it can get its hands on.

It may seem contradictory for the government to be so careless with the health of the nation's workforce. However, it is worth remembering that welfare policies are ultimately paid from surplus value that would otherwise appear in the bank accounts of capitalists. The welfare state may stave off class struggle and smooth the reproduction of the workforce, but it runs directly against the pauperising tendency of capitalism to maximise profit rates. As the bosses increasingly consider this drain on their falling profit rates unacceptable, the welfare system is an attractive target from which the government can scrape back value as its benefits do not immediately factor into profits. Any long-term benefits are sacrificed to the short-term demands of its big business clients for cuts, savings and efficiencies. The selling off of state assets to private companies is an intensification of this process, whereby the government gains funds freeing it from levying further taxes in the short-term, and at the same time the capitalists get another industry from which to extract profits.

The same old solutions will lead to worsening working conditions, lower pay, and worse public services. The only area with which the government is making a break with recent tradition is a massive increase to military spending. Liz Kendall, the Secretary of State for Work and Pensions, has even suggested that joining the army is a cure for unemployment among the young (who under the new plans will not be able to apply for UC disability benefits until the age of 22). The message is clear: whether on the home front or overseas, the Labour Party expects you to destroy your body, make yourself sick, and even give your life for ruling class profits.

The only hope in resisting this decline can come from workers organising themselves. The wave of strikes of workers in the health sector during 2022 and 2023 is a good idea of what’s possible, but this was stymied by the union structure which separated workers within the same industry from each other, and by the union leadership, who obstructed action and accepted deals far below what was originally asked. Health and education workers are those most clearly on the front lines of the social reproduction crisis in which these cuts are the latest front. So it makes sense to focus on them as agents of struggle. However, these latest cuts are also the latest of a series of attacks on the working class in its wider sense, that is not just those in employment, but all those unemployed and underemployed who make up the reserve army of labour and those disabled by the system itself. The struggle is rightly then one of the entire class and on this basis should be organised.

JS
Communist Workers’ Organisation
27 March 2025