Conservative Party leader Kemi Badenoch. (Image: Getty)
The Conservatives are pledging to cut back disability and sickness benefits and to reinstate the two-child benefit cap as part of plans to slash billions from the welfare bill, as its weight is “crushing our economy”. Party leader Kemi Badenoch had already announced plans to cut £36.1 billion per year in benefits at the Conservative Party conference last month, but at an event on Tuesday, the party is now expected to set out further details on how it would get there.
The cuts are to include £13.7 billion from reforms to disability and sickness benefits, including scrapping payments for mild mental health conditions and routine back and joint pain. The Conservative leader also said the welfare bill is “more than the entire GDP of Ukraine” and argued that many people facing challenges can contribute, citing double amputees who run marathons and autistic people running some of the world’s biggest tech companies.
Another £9.5 billion will come from ending benefit claims for foreign nationals without EU settled status, and £3.1 billion by limiting child benefits to two children per family – a policy scrapped by Labour last year. Child disability living allowance would take the form of support rather than cash handouts for mild learning and behavioural conditions, saving £2.8 billion, while new plans to tackle fraud and error would raise £1 billion, they say.
Mrs Badenoch is expected to say today: “The question of whether we should cut welfare goes to the heart of what sort of country we want to be. It exposes a fundamental difference between Labour and the Conservatives. Labour MPs think cutting welfare is always cruel. They believe the kindest thing you can do for someone who is struggling is to tell them it’s okay not to look after themselves. That there’s nothing wrong with a life of dependency.”
While acknowledging that there must be a safety net for those who “genuinely cannot work,” she also will say the weight of the welfare burden is “crushing our economy”. She will add: “But the reality is that millions of people can and do contribute – to our economy, to their families, to their communities – even when they face serious challenges.
“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. 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. Conservatives believe in a system that looks at people through the lens of what they can do – not what they cannot.”
The Office for Budget Responsibility forecasts it will rise to £431 billion by the 2031-32 financial year, largely driven by health-related and pensioner benefits.
Reviews into disability benefits and getting more of the 45% of young people who are not in employment, education or training (NEETs), led by Stephen Timms and Alan Milburn respectively, are expected to report in the coming weeks.
Mrs Badenoch will say the weight of the weight of the the welfare burden is ‘crushing our economy’ (Image: Getty)
A Labour Party spokesperson 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. You can’t trust them to solve problems they created in the first place.
“The Conservatives designed and implemented this benefit system, which has driven large numbers of people to be signed off and written off. In the Tories’ last year in government, the welfare bill rose by a record £33 billion.
“Labour is tackling the collapse in face-to-face assessments, bringing in personalised employment support for sick and disabled people and spreading opportunity to young people through the Youth Guarantee. Further reforms will follow the Milburn and Timms Reviews.”
Kemi Badenoch Reveals Bombshell £36bn Plan to Slash Welfare Bill ‘Crushing Our Economy’
Kemi Badenoch has unveiled an ambitious £36 billion plan to reduce Britain’s growing welfare bill, setting up a major political confrontation with Prime Minister Andy Burnham over the future of public spending, disability benefits and the country’s economic stability. The Conservative leader argues that the existing welfare system has become financially unsustainable, placing an enormous burden on taxpayers while discouraging people who could work from returning to employment. Her proposals represent a significant attempt to reshape Britain’s benefits system and draw a clear distinction between Conservative and Labour economic policies. However, the announcement has also triggered fierce criticism, with opponents warning that some of the proposed changes could push vulnerable people into poverty and create additional pressure on already struggling public services.
Speaking on November 10, 2026, Badenoch presented the Conservatives’ detailed welfare reform programme, arguing that Britain cannot build a stronger economy while spending such enormous sums on working-age benefits. She highlighted the fact that annual working-age welfare spending is approximately £183 billion and claimed that the proposed reforms could save £36 billion every year when implemented.
Her central argument is that the welfare system should help people overcome difficulties and return to employment wherever possible, rather than leaving them dependent on long-term financial support. She insists that people with genuine and severe disabilities must continue receiving protection, but believes that millions of others could contribute more to society with appropriate encouragement and support.
The announcement is particularly significant because welfare expenditure has become one of the most controversial subjects in British politics. Rising sickness-related benefit claims, long-term unemployment and economic inactivity have created difficult challenges for successive governments. At the same time, taxpayers are increasingly concerned about the amount of public money being spent and whether the current arrangements offer value for money.
Badenoch believes that fundamental reform is unavoidable. Her plan identifies several areas where the Conservatives believe savings could be achieved, with the largest reductions coming from changes to sickness and disability benefits.
The proposed reforms to disability and sickness payments are expected to generate approximately £13.7 billion in annual savings. The Conservatives want to change eligibility arrangements for people with conditions they classify as less severe, including certain mental health conditions and routine back and joint problems.
This is arguably the most controversial part of the entire package. Personal Independence Payment, commonly known as PIP, is designed to help people with long-term health conditions or disabilities meet additional daily living and mobility costs. It is not simply an unemployment payment, and receiving PIP does not automatically mean someone cannot work.
Critics therefore argue that changing eligibility based on assumptions about particular medical conditions could create serious difficulties for people whose disabilities are not immediately visible. Anxiety, depression and other mental health conditions can have substantial effects on an individual’s ability to manage everyday activities.
The Conservatives maintain that assessments should focus more carefully on what individuals can actually do and what support they genuinely require. Badenoch argues that people should not automatically be written off because they have a medical diagnosis.
She has pointed to examples of people with significant physical disabilities achieving remarkable things, arguing that the welfare system should encourage independence rather than create expectations of permanent dependency.
Another major element involves restricting access to certain benefits for foreign nationals who do not have EU settled status. The Conservatives estimate that this proposal could save approximately £9.5 billion annually.
The party argues that eligibility for taxpayer-funded benefits should be more closely connected to citizenship, immigration status and previous contributions to the system. However, the details would need to respect existing legal rights, including protections applying to people with settled status and relevant international obligations.
The proposal would inevitably generate debate about fairness, immigration and the responsibilities of the British state towards people who have established their lives in the country.
A further £3.1 billion in savings is expected from restoring the two-child limit for Universal Credit and certain tax credit arrangements. Labour removed the restriction in 2025, allowing eligible families to receive support for more than two children.
Badenoch wants to reverse that decision, arguing that the welfare system should encourage financial responsibility and ensure that public expenditure remains under control.
However, opponents argue that reinstating the restriction could increase financial hardship among larger low-income families. They believe children should not suffer because of decisions made by their parents and warn that reducing financial support could increase demand for food banks and other emergency assistance.
The Conservatives also propose changing support for children with mild learning and behavioural difficulties. Their plan suggests replacing some direct cash payments through Child Disability Living Allowance with alternative forms of support, which the party estimates could save £2.8 billion annually.
Another £1 billion is expected to come from tackling benefit fraud and administrative errors. This proposal is likely to attract attention across the political spectrum because reducing fraud and improving the accuracy of public payments are widely recognised as important government responsibilities.
Nevertheless, the scale of the proposed savings has raised questions about whether the Conservatives can deliver the full £36 billion without creating unintended consequences.
The economic argument behind Badenoch’s announcement is straightforward. The Conservatives believe that reducing welfare expenditure would help lower government borrowing, ease pressure on taxpayers and create additional resources for other priorities.
The party has also connected its savings programme to defence spending and potential tax reductions. Under its wider economic strategy, at least half of identified savings would be directed towards reducing the deficit, with the remainder available for tax cuts and growth measures.
Badenoch argues that Britain cannot continue borrowing large sums while allowing welfare expenditure to increase without sufficient scrutiny. She believes a more sustainable system would help strengthen the economy and improve the country’s ability to invest in essential national priorities.
However, Labour has strongly rejected the Conservative approach. A Labour spokesperson accused the Conservatives of attempting to escape responsibility for problems that developed during their own years in government.
Labour argues that the previous Conservative administration allowed welfare expenditure to increase substantially and failed to address the underlying causes of rising sickness and economic inactivity.
The government has instead emphasised personalised employment support, improvements to face-to-face assessments and programmes designed to help young people enter the workforce.
Prime Minister Andy Burnham has also questioned whether large-scale welfare cuts would deliver the promised savings. His government argues that helping people recover, access appropriate treatment and find suitable employment could be more effective than simply reducing benefit payments.
This disagreement reflects two fundamentally different approaches to public spending. Conservatives favour stricter eligibility rules and substantial reductions in expenditure, while Labour places greater emphasis on employment support, intervention and investment.
Neither approach is without challenges. Large-scale cuts could reduce government expenditure, but if people lose essential support and become unable to maintain stable housing or access healthcare, other public services could face additional costs.
Equally, increasing employment support without addressing the financial sustainability of the benefits system could leave taxpayers facing rising expenditure for years.
The Office for Budget Responsibility forecasts that total welfare spending, including the State Pension, could reach £431 billion by the 2031-32 financial year. This includes substantial expenditure on pensioners as well as working-age benefits, so it should not be confused with the Conservatives’ £36 billion working-age welfare savings target.
Importantly, the £36 billion figure is the Conservatives’ own estimate. It has not been independently certified by the OBR, and the actual savings would depend on the final legislation, implementation arrangements and behavioural responses.
For millions of people receiving disability benefits, the proposals are more than an argument about government finances. They concern financial security, independence and the ability to manage everyday life.
The government must therefore ensure that any reforms distinguish between people who could realistically return to employment and those whose conditions make working impossible or exceptionally difficult.
Employers also have an important role. If Britain wants more people with disabilities and long-term health conditions to enter employment, workplaces must become more accessible and flexible. Appropriate adjustments, part-time opportunities and better occupational health services could help many people remain economically active.
Ultimately, reducing welfare expenditure cannot be achieved through benefit restrictions alone. Britain also needs stronger economic growth, better healthcare, improved skills training and more opportunities for people who want to work.
Badenoch’s announcement has placed these questions firmly at the centre of the political debate. Her £36 billion proposal gives voters a detailed indication of the scale of welfare reform the Conservatives want to pursue, while Labour must explain how it intends to control spending without relying on similar restrictions.
The coming months will reveal how both parties respond to the challenge of rising welfare expenditure and economic inactivity. For taxpayers, the priority is a system that is affordable, transparent and properly managed. For vulnerable people, the priority is knowing that genuine needs will continue to be recognised and supported.
In conclusion, Kemi Badenoch’s £36 billion welfare reform plan represents a major political challenge to Andy Burnham’s Labour government. The Conservatives argue that Britain’s existing benefits system is placing an unsustainable burden on the economy and that substantial changes are needed to restore financial discipline and encourage employment. Their proposals include major changes to disability benefits, restrictions on certain claims by foreign nationals, restoring the two-child limit and tackling fraud. However, the plan has generated serious questions about its practical consequences, particularly for people with disabilities, mental health conditions and families on low incomes. The £36 billion saving remains a Conservative estimate rather than an independently verified financial outcome. Labour argues that investment in employment support and healthcare offers a different route to reducing long-term welfare costs. Ultimately, Britain needs a benefits system that protects people who genuinely cannot work while helping those who can find meaningful employment. The challenge for both parties is to demonstrate that their policies can achieve financial sustainability without creating greater hardship for vulnerable households. The debate is no longer simply about how much Britain spends on welfare, but about what kind of social security system the country wants for the future.