Conservative leader Kemi Badenoch will today set out a £36 billion-a-year welfare savings plan, urging people with anxiety and other low-level conditions to show a “can-do spirit” and arguing that the benefits bill is “crushing our economy”.

The Tory leader wants to make big inroads into the £180 billion a year spent on working-age adults. Her “Welfare that Works” package would take claims away from 2.5 million people for what the party calls “low-level” problems, such as mild mental health issues and bad backs.

“The weight of this welfare burden is crushing our economy and plunging us deeper and deeper into debt,” Badenoch will say in a speech today. “There is no world in which the current system is sustainable and not just because of the cost.”

Where the savings would come from

The plan includes £13.7 billion of cuts from reforms to disability and sickness benefits, including for mild mental health conditions and routine back and joint pain. A further £9.5 billion would come from ending benefit claims for foreign nationals without EU settled status, and limiting child benefit to two children per family would save £3.1 billion.

The Conservatives say the £36 billion total is the party's own estimate. The measures are proposals from the opposition, not enacted policy, and would need a Conservative government to become law.

Child disability benefits in focus

A central plank of today's announcement concerns child disability living allowance (DLA), a benefit that helps parents with the extra costs of looking after a disabled child. Badenoch will announce plans to stop hundreds of thousands of children with behavioural disorders and ADHD claiming the benefit, in a move the party says would save £2.8 billion.

Under the reforms, only the most severe 30 per cent of cases would qualify for cash support. In March this year, more than 770,000 children with ADHD, behavioural disorders or learning difficulties were receiving the benefit, accounting for 85 per cent of all child DLA claims.

Badenoch will argue that telling young people their condition defines them does lasting damage. “If you tell a young person that their ADHD means they are defective and will never amount to anything, that mindset is likely to be more destructive to their future than the condition itself,” she will say.

She will also point to people who have achieved despite adversity, saying: “Double amputees run marathons. People who are housebound do wonderful, creative work from home. People with autism run some of the biggest tech companies in the world.”

Labour hits back

Labour rejected the plan. A Labour spokesman said: “The Tories let the welfare bill soar on their watch. Now they have the audacity to pretend it was nothing to do with them.”

Badenoch is aiming to draw a contrast with Prime Minister Andy Burnham, who has been unable to guarantee that the welfare bill will fall before the next election. Shadow work and pensions secretary Helen Whately said: “The Conservatives have done the hard graft in opposition to make the difficult choices to bring the benefits bill down. Our detailed plans will save £36bn from the welfare bill.”

The announcement comes as the Government's own welfare adviser, Alan Milburn, prepares a long-awaited report on the future of the benefits system, expected next week.