Kemi Badenoch sets out plan to slash £36billion from Britain's runaway welfare bill - amid warnings it costs the average taxpayer £4,000 a year

Published: 17:00 EST, 9 November 2026 | Updated: 17:17 EST, 9 November 2026 Kemi Badenoch is to unveil a detailed plan to slash £36 billion from the benefits bill, as she warns the cost of the welfare system is 'crushing our economy'.The Conservative leader will pledge to axe sickness and disability benefits for low-level mental health conditions and back pain, taking 2.5 million people out of the system.Foreign nationals from outside the EU will be barred from claiming benefits in this country.And the two-child benefit cap scrapped by Labour will be reinstated, saving the taxpayer £3.1 billion a year.Mrs Badenoch will publish a 52-page report setting out the case for reform and the details of the proposals.In a landmark speech on Tuesday, the Tory leader will highlight the latest official figures showing that working age welfare now costs the country £180 billion a year.The figure equals around £500 million a day and is more than the UK spends on defence, education and the police combined. The sum costs the average taxpayer more than £4,000 a year each and is more than the entire GDP of Ukraine.'The weight of this welfare burden is crushing our economy and plunging us deeper and deeper into debt,' she will say. 'There is no world in which the current system is sustainable and not just because of the cost.' Kemi Badenoch will warn the scale of Britain's welfare bill is 'crushing our economy'Mrs Badenoch will argue that the approach to welfare exposes a 'fundamental difference' between the Conservatives and Labour, who think that 'cutting welfare is always cruel' and that there's nothing wrong with a life of dependency',She will acknowledge that some sick and disabled people 'genuinely cannot work' and will always need a welfare 'safety net'.But she will warn the current system risks creating a damaging dependency culture, adding: '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. That is what our welfare system is currently doing.'Mrs Badenoch will contrast the Tories' detailed work on welfare reform with the latest delays to Andy Burnham's 10-year plan for government, which he first promised in the summer.'It is too late to work out what you think once you're in government,' she will say. 'If you want to change this country, you need to know exactly what you want to do and how you're going to do it.'The new plan, titled Welfare that Works, sets out a string of proposals for curbing the runaway welfare budget.Other measures include trimming £4.5 billion from the housing benefit bill which is forecast to hit £42 billion by the end of the parliament – a £10 billion increase in five years. In future, payments would be pegged to rents in the cheapest 10 per cent of the market, instead of the cheapest 30 per cent.The plans also involve a back to work programme, including lifting the cap on apprenticeships and halving employers' national insurance payments for workers aged under 25.The Tory document acknowledges that the party's reforms will be 'fiercely resisted', saying that welfare reform is 'not easy'.But it argues that reform can no longer be ducked.Shadow welfare secretary Helen Whately said the bill was running 'out of control', adding: 'Beveridge's welfare state was a noble ambition. To stand by those who could not stand on their own. But today's system has grown far beyond anything he envisaged. A safety net designed for a country emerging from war now funds free cars for people claiming for acne and tennis elbow.'The government was forced to abandon plans to shave £5 billion off the welfare bill last year following a revolt by Labour MPs.The Prime Minister has said he is determined to rein in welfare spending 'in a Labour way', avoiding 'crude cuts'.Reviews of youth unemployment and disability benefits are expected in the coming weeks. But neither are likely to lead to short term savings, with ministers admitting that Alan Milburn's plan to tackle the youth unemployment crisis is likely to carry substantial upfront costs.Chancellor John Healey has warned that the welfare bill will not be cut before the election. How the Tories' £36bn welfare cuts add up :: Reform sickness benefits, including ending claims for mild mental health conditions and routine back pain. Savings £13.7 billion:: End benefit claims for non-EU foreign nationals. Savings £9.5 billion.:: Peg housing benefit to rents in the cheapest 10 per cent of the market and cap social rents for five years. Savings £4.5 billion.:: Bring back the two-child benefit cap. Savings £3.1 billion.:: Child disability living allowance. Cut payments for those with mild mental health and behavioural disorders. Savings £2.8 billion.:: Reform household benefit cap to require all adults in the family to work at least 16 hours a week. Savings £1 billion:: Reform Motability by ending VAT exemption for lease payments. Savings £1 billion:: Cut fraud and error. Savings £1 billion :: Introduce lower 'subsistence allowance' for long-term unemployed. Savings £500 million.*Figures include an additional £1 billion to take account of the possibility that some measures will hit the same people more than once