Of all the obdurate lies peddled by the Conservative Party in the run-up to the last general election, perhaps the most callous was when the Tory disability spokesperson Mark Harmer told key representatives of Britain's millions of disabled and mentally unwell citizens: "I don't think disabled people have anything to fear from a Conservative government." It turns out that disabled people have a great deal to fear.

Despite a fraud rate of just 1 per cent, the government is determined to toss 500,000 people who currently rely on sickness benefits into the open arms of the bleakest labour market in a generation, to cut already meagre disability stipends to starvation levels, to confiscate mobility scooters and community groups from the most needy, and to remove key services that make life bearable for thousands of families with vulnerable relatives. The party assures us that someone's got to pick up the tab for the recklessness of millionaire financiers. So, naturally, they're going to start with the disabled and the mentally ill.

Disabled people, their friends, family members and allies, have much to fear – and much to fight. Today has been designated a national day of action against benefit cuts, and resistance groups across the country will be staging protests and spreading the word about how the government's plans to dismantle most of the welfare state and privatise the rest will affect them. "Housing benefit cuts mean I'm probably going to lose my home," says Carole, 32, "but the removal of the Incapacity Benefit safety net means that I'm terrified of looking for work. If I'm made to do a job I'm not well enough for and have to leave, I'll be left penniless. I don't know what to do."

Many of the demonstrations will target private companies like Atos Origin, which have been given government tender to impose punitive and – studies have shown – largely unreliable medical testing of welfare claimants before forcing the sick to seek work that even the healthy can't get. Campaigns like Benefit Claimants Fight Back are quite clear what they think about these companies – they are "poverty pimps".

As Britain's welfare claimants who are well enough to do so take to the streets, the beleaguered workers responsible for administrating the ersatz and vituperative benefits system have just finished a 48-hour strike over the way their jobs are being restructured to meet increasingly high targets of claimant turnover. "The system is driven towards saving money at the expense of vulnerable people. We want to help people but they're not letting us," says William, a 22-year-old worker in a call centre that deals with Incapacity Benefit claims. "You get old people phoning up in floods of tears when their relatives have died."

"I hate them calls. We're so limited in what we can say because all our calls are recorded and they watch us all the time. You're chained to your desk. It's hell working here," he says.

"We have people off sick with stress all the time – I've had to take medication for anxiety and I normally consider myself quite a strong, down-to earth person," Davies adds. "People come to work in tears, but they're terrified of saying they can't cope, because they know just what happens if they have to go on the sick.

"Nobody wants to have to deal with our system from the other end."

The withering of the welfare state is not just a party game. The gradual erosion of the principle, formalised in the Attlee settlement, that people who are unable to work and support themselves should not be left with nothing to live on, did not start with this government. Labour formalised the process in 2008, mounting grandiose campaigns against "welfare cheats" and flogging off support services to private companies whose express purpose was to deny benefits to as many people as possible – including, in several cases, terminal cancer patients. The argument, put forward by many commentators, that punitive welfare reform can't be that bad because "Labour started it", is the political equivalent of sticking your fingers in your ears and humming to block out the angry cries of a million human beings deprived of their dignity.

This is more than a party game. For New Labour, the financial intimidation of the sick and vulnerable was, in part, a desperate appeal to the prejudices of voters in marginal seats, a strategy tried and tested by PR professionals in Clinton's second term who later came to work for the Blair/Brown administration. Bullying people off benefits, however, is about more than just votes. It's part of a creeping cultural shift towards a public consensus that there is no room in this society for the weak.

In this country and across the developed world, labour is precarious, competition for jobs and adequate pay is fierce, workers are under terrific pressure and anyone who cannot keep up with the rat race, whether through sickness, mental ill health or physical disability, is mistrusted and shamed. "My clients frequently express more shame that they are not able to work than over the perceived inferiority of their bodies," comments an anonymous disability worker. "In a materialist society, apparently, the ultimate failure of the disabled is that we don't make money."

We like to think of ourselves as a nation where, if anything, 'political correctness' has gone too far, but our attitude towards people with disabilities and mental health problems has barely improved in 20 years. A recent survey revealed that four out of five employers would prefer not to take on anyone with a history of mental health problems. Meanwhile, rather than question the terms of a target-driven labour market whose precariousness routinely drives workers to the edge of mental and physical breakdown, ordinary people are taught to kick down savagely at any fellow citizen who can't keep up.

This is not just about a culture that puts profit before people. This is about a culture that has begun to believe, on some deep and terrifying stratum, that if one cannot turn a profit, one is not really a person at all. Disabled people and their allies are fighting back in whatever way they can. Shame on the rest of us if we do not fight with them.