Austerity cuts are having a “profoundly disturbing” impact on people’s psychological wellbeing and the emotional state of the nation, hundreds of counsellors, psychotherapists and mental health experts have said in a letter to the Guardian.

They said an “intimidatory disciplinary regime” facing benefits claimants would be made worse by further “unacceptable” proposals outlined in the budget.

These amounted to state “get to work” therapy and were both damaging and professionally unethical, they said.

Increasing inequality and poverty, families being moved out of their homes and new systems determining benefit levels were part of “a wider reality of a society thrown completely off balance by the emotional toxicity of neoliberal thinking”, according to more than 400 signatories to the letter. The consequences were “most visible in the therapist’s consulting room”.

The letter’s writers said it “sounds the starting bell for a broadly based campaign of organisations and professionals against the damage that neoliberalism is doing to the nation’s mental health”.

Labour first introduced work capability assessments but the coalition introduced a much more stringent regime.

The 2015 budget included plans to provide online cognitive behavioural therapy to 40,000 claimants and people on the Fit for Work programme, as well as putting therapists in more than 350 job centres.

The letter was being organised before the Conservative party manifesto was published earlier this week. This said that those with long-term but treatable conditions, including drug or alcohol addiction and obesity, might lose benefits if they refused recommended treatments.

The response from main political parties was muted, each stressing only their commitment to improving mental health rather than addressing the call for professionals to wake up to “malign developments” in social policy.

The letter’s supporters included psychotherapist and writer Susie Orbach. She called “beyond shocking” the Conservative manifesto proposal.

“It undermines the fundamental principles of one’s right to physical and mental care – that you have to be able to consent and that the people you go to have to be highly trained and have your best interests and aren’t meeting targets.”

She added: “And we certainly don’t want claimants’ and job-seekers’ aspirations and paltry money dependent on whether they take up treatment options, which bounce them into mental health treatments which may not suit them, and which violate all of our notions of what constitutes a minimum standard for productive engagement in therapy: in short, consent.”

Andrew Samuels, an Essex University professor, and immediate past chair of the UK Council for Psychotherapy, insisted the letter was not pro-Labour but was aimed at getting a review of measures taken and proposed over the past five years

“If Labour decides afterwards all this is in order, it will go on. But I don’t think it will. I don’t see how it can,” he said.

Samuels believed there was “a bit of a public school ethos” behind the work-capability regime introduced under the Conservative-Lib Dem coalition and new Conservative plans.

Characterising the government attitude as “Pull yourself together man, for heaven’s sake,” Samuels added: “It is wholly inappropriate. It symbolises a society that has lost all moral compass.”

Richard House of the Alliance for Counselling and Psychotherapy, the letter’s main organiser, said there had been a mounting groundswell of concern. “When one hears story after story of dramatic negative health impacts, psychological and physical, after people are subjected to these back-to-work practices, the time has surely come for an ‘emotional audit’ of the impact of what, to many, appear to be heartless, un-thought-through policies that are merely penalising and punishing the already disadvantaged still further.”

A Conservative spokesman said: “Under this government inequality has fallen, child poverty is down and there are now 1.9 million more people in jobs than there were at the last election. We have legislated to ensure mental health is treated equally to physical health, and are introducing new waiting time standards.”

The party spokesman added: “Overall spending on mental health has increased, including over £400m to make a choice of psychological therapies available for everyone who needs them.

“We will continue to invest in mental health and are committed to spending an additional £1.25bn over the course of the next parliament. All of this is only possible because our plans are backed by a strong economy.”

Luciana Berger, Labour’s shadow health minister, said: “Mental health is the biggest unaddressed health challenge of our age and it is essential that we give it the priority it deserves.

Labour would create a new right to talking therapies in the NHS constitution, working towards a standard of 28 days waiting time, said Berger.

“We will end the scandal of the neglect of child mental health, too, by increasing the proportion of the budget spent on these services.”

Norman Lamb, Lib Dem minister in the Department of Health, said: “The Liberal Democrats are on a mission to end the discrimination against mental health in our society. That’s why in government we introduced the first ever waiting time standards. It’s also why we are pledging at least £3.5bn extra funding over the next parliament to provide better mental healthcare.”

“The economic shock that this country faced five years ago has of course had an impact on mental health, and that’s why we were determined to build a stronger economy and why we fought to exempt disability benefits from cuts.

“We want to make sure people with mental health problems get the right help to stay in, or get into, work that can help their recovery. We will block the £12bn welfare cuts that the Tories propose.”