Two hundred thousand disabled people will each lose almost £3,000 a year as a result of sweeping cuts to disability benefits, according to Labour analysis.

It finds that reforms to the personal independence payment (PIP) – set to raise £1.2bn for the Treasury – will have to take 200,000 people out of the system altogether.

A further 400,000 will see their weekly payment fall from the enhanced £82 to the standard £55 – costing them over £1,400 a year.

Disability charities have described the plans as “devastating” – arguing that vulnerable individuals will no longer have access to simple aids and appliances that allow them to live independently.

Campaigners will hit out at George Osborne this week when he includes the savings in his budget.

Meanwhile, Frank Field MP said the work and pensions select committee, which he chairs, may want to raise the issue in a future inquiry.

The reform will mean that from next year people will only be awarded one point, instead of two, if they need aid to help them use the toilet or get dressed – resulting in lower or no payments.

Field told the Guardian that he had grave concerns about the PIP system, after constituents told him they were being awarded zero points, then having the decision overturned on appeal.

He gave examples of people being treated badly during assessments including one man who had such bad heart “pounding” during an assessment that paramedics had to be called. However, he was still given no points – only to have the decision later reversed.

Field has written to the work and pensions secretary, Iain Duncan Smith, about his concerns – in particular calling for individuals to be allowed to record their assessments.

Owen Smith, the shadow work and pensions secretary, said the government was treating people callously with the latest cuts, “targeting people who are not able to manage toilet needs or dress unaided”.

“For the Tories to suggest making these cuts to fund tax reductions for the wealthiest is deeply cruel and shows just how warped their priorities are.

“Under the Tories, disabled people have already borne among the biggest brunt of the cuts, losing over £24bn in support.”

Phil Reynolds, policy and campaigns adviser at Parkinson’s UK, said: “This is a devastating step backwards for people with Parkinson’s. Parkinson’s impacts on every aspect of a person’s life and the government’s announcement that it will cut points in this way is absolutely senseless.”

Osborne claimed that the PIP was introduced by the government to offer more support for individuals, but an independent review suggested the assessment needed to be changed. He insisted that those in the greatest need would still get additional help, and argued that the money spent on disability benefits was rising, just by less than anticipated.

“Controlling welfare bills is part of what you have to do if you are a secure country able to confront the problems in the world,” he told the BBC’s Andrew Marr Show.

Labour will press the PIP issue hard this week. It is also claiming that Osborne is set to miss his export target by over £400bn. Angela Eagle, the shadow business secretary, said the Conservatives had an “appalling record” on meeting targets, and called for a “proper industrial strategy”.