Britain did not stumble into its labour market crisis. It was engineered, decision by decision, by ministers who chose imported labour over investment in the British people. That is the Centre for Social Justice's verdict on the record its landmark report assembles, and nothing in the government's own statistics undermines it. Now the bill has arrived.
Four in five of the additional payroll employments created in Britain since 2014 have gone to workers from overseas, according to research published on Tuesday by the Centre for Social Justice. Of the roughly 3.7 million net additional employments recorded through the PAYE tax system between 2014 and the end of 2025, just 734,000 went to British nationals. EU nationals took 408,000. Non-EU nationals took around 2.5 million.
That is not, the inquiry concludes, a labour market responding neutrally to demand. It is the visible result of choices made in Whitehall.
The same study found that the number of people receiving out-of-work benefits has risen by 2.3 million since 2020, the very period in which non-EU employment on payrolls surged by 2.1 million. Annual spending on working-age benefits is now on course to reach £136.1 billion in 2026/27, up £49.6 billion in real terms since 2019/20, the report calculates from official DWP figures. That increase alone is worth around £1,200 for every income taxpayer in the country.
The report ministers cannot ignore
State of Dependency, a 250-page study and the first output of the CSJ's Welfare 2030 inquiry, is chaired by Sir Iain Duncan Smith, the former Work and Pensions Secretary whose earlier Breakdown Britain work produced the blueprint for universal credit. The inquiry's conclusion is damning: successive governments, of both main parties, used welfare to manage economic failure and immigration to avoid fixing it.
The CSJ puts it in one sentence: "Britain has practised a form of human quantitative easing, importing workers to expand headline GDP while allowing millions of people already here to drift away from the labour market."
The distinction matters. Between 2006 and 2025, total GDP grew by 26 per cent in real terms. GDP per person grew by just 10 per cent. The headline economy expanded, but the prosperity of the people already here barely moved.
Who took the decision, and when
On the inquiry's reading, the numbers follow the policy with uncomfortable precision. The decisive shift came after 2020, when Boris Johnson's government rebuilt the immigration system to run wide open. Senior care workers became eligible for the Skilled Worker route on 1 December 2020, while care workers became eligible for the Health and Care visa from 15 February 2022, decisions taken under the then home secretary Priti Patel, and the post-study Graduate route was reintroduced in 2021. Net migration peaked at a record 944,000 in the year ending March 2023, driven overwhelmingly by non-EU arrivals.
The consequences show up in HMRC's own payrolls. Official data on employments by nationality show that between December 2020 and December 2025 the number of non-EU nationals on UK payrolls rose by 2.1 million. UK-national employment, having clawed back ground during 2021, then fell by 498,700 between December 2021 and December 2025, to 25.6 million.
The regional picture is starker still. Between January 2020 and December 2025, payroll jobs held by British nationals fell in nine of the UK's 12 nations and regions, including every English region except the North West. Scotland lost 53,000 British-national payroll jobs, the West Midlands 32,000, the South East 31,700, the East of England 29,400 and London 26,500. Over the same period, non-EU employment rose in every single nation and region: by 465,200 in London, 284,500 in the South East, 223,900 in the North West and 220,300 in the West Midlands.
Nearly two thirds of the growth in non-EU payroll jobs since 2020 came in four sectors: health and social work (29 per cent), administrative and support services (16 per cent), accommodation and food services (12 per cent) and wholesale and retail (10 per cent). These are precisely the sectors that have traditionally provided first jobs, second chances and routes back into work for people with no qualifications and no contacts. The report does not claim that every migrant worker displaced a British worker, and ministers will no doubt point to vacancies that went unfilled. Its charge is that successive governments found it easier to pull the lever of overseas recruitment than to rebuild the skills, health and local economies of the people already here. While the visa routes multiplied, those rungs of the ladder were left to rot.
Millions written off, and a state that pays them to stay there
Around 6.7 million people across England, Wales and Scotland now receive at least one out-of-work benefit, roughly one in six working-age adults. Since 2019, the number of claimants facing no requirement to seek or prepare for employment has risen by almost 1.7 million.
The CSJ identifies a new benefit trap at the heart of the system. In one illustrative scenario, a single economically inactive claimant receiving Universal Credit health and housing support alongside both enhanced components of personal independence payment can receive around £27,400 a year, tax free. To take home the same amount, a worker on the National Living Wage would need to earn more than £33,000, more than 50 hours a week. Not every claimant receives anything like that sum, and the CSJ does not suggest otherwise. The point is the incentive structure the comparison exposes. The state has become, in the inquiry's words, highly effective at financing worklessness and remarkably ineffective at reversing it.
The inquiry also exposes how the machinery of the Treasury encouraged the whole experiment. Official fiscal forecasts run five years ahead, so they capture the immediate tax receipts from an extra million workers while the costs, in welfare, healthcare and ageing, fall beyond the horizon. Ministers of both parties learned to book the gains and ignore the bills. Taxpayers absorbed the growing cost of domestic worklessness while employers were handed an ever larger pool of overseas labour.
The report also maps 3,369 welfare hotspots in England and Wales, home to around 860,000 people, where the number of out-of-work claimants exceeds half of the working-age population. These places read like a list of the communities forgotten by thirty years of centralised economic policy.
The political response: recognition arrives, answers do not
Sir Iain Duncan Smith said: "The report shows that this crisis extends beyond the benefit system. The truth is that successive governments have used welfare over decades to compensate parts of the country for economic failure rather than creating the conditions for prosperity.
"Compounding this, ministers have repeatedly pulled the easy lever of immigration rather than providing a better deal for left behind communities. Welfare reform, immigration and regional growth must now be treated as parts of the same challenge."
Robert Jenrick, Reform UK's Treasury spokesman, who defected from the Conservatives in January 2026, said: "This report illustrates just how harmful mass migration has been for the jobs market. Reform will reverse Rachel Reeves's jobs tax for British workers, paid for by a levy on migrant labour, to put British workers first again."
Credit where it is due: it was Jenrick's former party that first tightened the screws after the 2023 peak, banning most students from bringing dependants from January 2024 and most care workers from bringing family members from 11 March 2024, before Labour closed the overseas care worker route to new applicants on 22 July 2025. The measures are working in the flow numbers. Net migration fell to 171,000 in 2025, down from the 944,000 peak. But the welfare rolls have not followed the visas down, and the Conservatives' record on the Boriswave itself stands as the central, damaging fact of their fourteen years in office.
A government spokesperson said: "The vast majority of this country's workforce is made up of UK nationals, and we have introduced a number of changes including a new skills-based migration system to put British workers first and welcome the high-skilled talent that our economy needs.
"We are also reforming the welfare system by creating almost a million work opportunities for young people through our youth guarantee, while investing £3.5bn to help disabled people and those with long-term health conditions move closer to the labour market."
The first claim is true and beside the point. Of course most of the workforce is British. The question the CSJ answers is what happened at the margin, and at the margin the recorded changes in the government's own payroll statistics are unambiguous. What explains them is the question the government would rather not answer. As for the welfare reforms the spokesperson cites, the expanded Jobs Guarantee for young disabled people does not begin until April 2027, and the £3.5 billion is spread over years of promised employment support. Against a benefits bill heading for £136 billion a year, that is not a rescue plan. It is a press release with a delay button.
What Great British PAC will be watching
Claire Bullivant, Chief Executive of the Great British PAC, said:
“Britain does not need another glossy Government announcement or more empty promises of reforms that risk being torpedoed by Labour's own backbenchers. It needs action, accountability and an immigration and welfare system that puts British interests first.
“The British taxpayer deserves answers, not excuses. Labour must stop talking about tackling dependency and start delivering a system that rewards hard work, restores opportunity and puts British people first.”
This report gives Parliament a clear test. If the government accepts that importing labour to avoid reforming welfare was a mistake, it will commission an independent and transparent assessment of the fiscal consequences of the post-2020 visa expansion, restore the value of work and the incentive to take it at the bottom of the labour market, and set measurable targets for reducing long-term inactivity and cutting the out-of-work caseload. Both main parties built this system, and both must answer for it. If the government refuses, taxpayers will keep funding the same failure twice: once in higher taxes, and once in the wasted potential of millions of their fellow citizens.
The statistics in this report are published and sourced, drawn from the government's own records. The economic and political conclusions drawn from them will be argued over, as they should be. What no one can argue away is the record itself, or the silence of the ministers who built it.