Mel Stride will promise to take a chainsaw to Britain’s spiralling welfare bill as part of a £47billion Tory savings drive. The Shadow Chancellor insists bringing down the colossal £300billion cost of benefits is in the national interest. He will use a major speech at the Tory party conference to say the country cannot “keep spending money we simply do not have”. Some £23 billion is expected to come from cuts to welfare, replacing payments to people with “low level” mental health conditions with treatment and barring non-citizens from claiming support among other reforms.

The move to shrink the benefits bill puts clear blue water between the Tories and Labour, after Keir Starmer was forced to water down his welfare reforms because of a growing backlash from his backbenchers. Nigel Farage has also promised to cut benefits if Reform UK enters government.

Sir Mel is also set to commit his party to reversing any change to the two-child benefit cap, widely expected to be in line for abolition at next month’s Budget.

The Tory veteran will use his keynote speech in Manchester to signal that the country must “live within our means”.

Promising to “never, ever make fiscal commitments without spelling out exactly how they will be paid for”, Sir Mel will say: “We’re the only party that gets it. The only party that will stand up for fiscal responsibility.

“We must get on top of government spending. We cannot deliver stability unless we live within our means. No more pretending we can keep spending money we simply do not have.”

He will commit his party to cutting Civil Service numbers by around a quarter, saving £8 billion, and reducing aid spending by £7 billion to 0.1% of national income.

Under David Cameron, the Tories introduced a target of spending 0.7% of national income on overseas aid, which was reduced to 0.5% following the pandemic and then cut again by the current Labour Government to 0.3% to pay for greater defence spending.

The Conservatives will also pledge to reduce spending on social housing, arguing there will be less demand for it once non-citizens are barred from receiving council accommodation.

Having vowed to repeal the Climate Change Act, Sir Mel will also set out plans to reduce green spending, including subsidies for heat pumps and electric vehicles.

On welfare, he will say that a Tory government will replace the “broken system of sickness benefits” with one that “properly targets help to those who need it most”.

That will include stopping claims for people with low level mental health problems because “what is really needed is treatment and support, not cash”.

The Tories have promised that only British citizens can access welfare and have vowed to reverse any lifting of the two-child benefit cap.

These measures will bring the welfare bill down by £23 billion, they say.

Sir Mel will promise to slash the number of civil servants from its current level of 517,000, 384,000, the 2016 level.

He says the measure will save one pound in every four spent, saving £8 billion in total.

Kemi Badenoch’s new Borders plan, which will end the asylum hotel scandal by removing all those who arrive illegally, will save a further £3.5 billion.

Another £4 billion of council housing subsidy will be freed up by ensuring that benefits and social housing are for British nationals, Sir Mel will say.

Further cost cutting will come from scrapping Ed Miliband’s “costly and ineffective green subsidies”.

The proposals have been welcomed by the Institute for Economic Affairs (IEA) but the think tank warned they ignored the “elephant in the room” of age-related spending such as pensions.

Earlier this year, the Office for Budget Responsibility warned the pensions triple lock, which remains Conservative policy, would prove “unsustainable” in the longer term.

Tom Clougherty, IEA executive director, said: “Ultimately, no political party is going to be able to balance the books only by cutting things their supporters don’t like.

“Long-term fiscal sustainability requires that we engineer a different trajectory for spending on pensions, social care, and old-age healthcare. Without that, other cuts are likely to amount to running to stand still.”

John O’Connell, chief executive of the TaxPayers’ Alliance, also welcomed the plans.

He said: “The fact that the opposition is placing spending reductions at the centre of its programme is hugely encouraging, and shows they understand just how bad a state the public finances are in.

“Taxpayers are crying out for tax cuts, but before serious reform of the tax system can take place, we urgently need to crack down on the size of the state both to credibly manage the nation’s finances and to restore a sense of freedom and responsibility for families and businesses.

“All of that means getting welfare under control and reducing the size and scope of the civil service, but will also eventually involve some sacred cows that politicians have been hesitant to touch.”

Labour Party chairwoman Anna Turley said: “The Tories let welfare bills, civil service numbers and asylum hotel use skyrocket on their watch – and they’ve never apologised. Now they want to rehash failed promises from their failed manifesto to try to solve the problems they caused.

“This is the same old Tories, with the same old policies. They didn’t work then and you can’t trust them now.”