- British nationals accounted for just 734,000 of the 3.7 million additional payroll jobs created since 2014
- British payroll numbers FELL in nine of the UK’s 12 regions since 2020 while non-EU employment has risen everywhere
- The number of non-EU payroll positions rose by 2.1 million since 2020 as the out-of-work benefit caseload grew by 2.3 million
- Major inquiry chaired by Sir Iain Duncan Smith says British nationals have been “written off” in favour of low-skill migrant labour
Just one in five additional payroll jobs created in Britain since 2014 went to British nationals, a landmark report reveals today.
Analysis by the Centre for Social Justice found that the number of jobs recorded through PAYE increased by approximately 3.7 million between 2014 and the end of 2025.
Just 734,000 of the increase was among British nationals. EU nationals accounted for a further 408,000, while the number of payroll jobs held by non-EU nationals increased by approximately 2.5 million.
Most of the increase has come since 2020, with non-EU payroll positions rising by 2.1 million. Yet new analysis reveals that the number of people receiving out-of-work benefits rose by 2.3 million over the same period.
Meanwhile, annual spending on working-age benefits is up by £50 billion in real terms since 2019/20.
The findings are published in State of Dependency, a 250-page report and part one of the Centre for Social Justice’s landmark Welfare 2030 inquiry, chaired by former Work and Pensions Secretary Sir Iain Duncan Smith MP.
The report warns that successive governments have relied on low-skill migration to fill jobs while millions of British people have instead been “written off” by the welfare system.
It says that Britain has accepted unprecedented inflows of overseas labour while taxpayers have absorbed the growing cost of domestic worklessness.
The shift has accelerated since the pandemic, fuelling perverse outcomes in the labour market. Between January 2020 and December 2025, the number of payroll jobs held by British nationals fell in nine of the UK’s 12 nations and regions, while those held by non-EU nationals increased in every one.
Scotland recorded the largest fall in British national payroll jobs, down 53,000. It fell by 32,000 in the West Midlands, 31,700 in the South East, 29,400 in the East of England and 26,500 in London.
Over the same period, the number non-EU payroll jobs increased by 465,200 in London, 284,500 in the South East, 223,900 in the North West and 220,300 in the West Midlands.
The growth since 2020 has been concentrated in sectors such as social care, hospitality and retail that have traditionally provided routes into work for people outside the labour market.
Health and social work accounted for 29 per cent of the increase in non-EU nationals on payrolls, followed by administrative and support services at 16 per cent, accommodation and food services at 12 per cent, and wholesale and retail at 10 per cent. Together, these four sectors accounted for around two thirds of the increase.
The inquiry also found that the way migration is treated in official economic forecasts encourages governments to prioritise increases in the size of the economy over improvements in living standards.
Between 2006 and 2025, total GDP increased by 26 per cent in real terms, while GDP per person grew by only 10 per cent.
The fiscal forecasts on which government decisions are based focus on the following five years. The report found this means that they capture the immediate increase in workers and tax receipts from policy changes favouring higher levels of immigration, while overlooking the longer-term costs that emerge as migrants become eligible for welfare and grow older.
The report argues that this has created a bias towards policies which help Chancellors increase their fiscal headroom through so-called “human quantitative easing” – even where it delivers little or no improvement in GDP per person and often carries greater fiscal costs beyond the forecast period.
It concludes that ministers have repeatedly prioritised importing labour over improving the skills, health and employment prospects of people already living in Britain. The report says:
“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.
“Employers have gained unprecedented access to overseas labour while taxpayers have absorbed the growing cost of domestic worklessness.”
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.
Around 6.7 million people across England, Wales and Scotland now receive at least one out-of-work benefit, equivalent to around one in six working-age adults.
Since 2019, the number of working-age benefit claimants facing no requirement to seek or prepare for employment has increased by almost 1.7 million.
State of Dependency concludes that Britain must invest in skills, employment support and its weakest regional economies while reforming welfare and immigration policy together to move more claimants towards employment.
Notes to editors
State of Dependency: How a broken benefit system is holding Britain back is the first report from the Centre for Social Justice’s Welfare 2030 inquiry. It is available here.
The analysis uses HM Revenue and Customs data on UK payrolled employments by nationality, region, industry, age and sex. Payrolled employments are jobs recorded through PAYE Real Time Information. Nationality is based on the nationality recorded in HMRC data. The national comparison covers the change in payrolled employments between 2014 and December 2025. Figures have been rounded.
The regional comparison covers January 2020 to December 2025. The number of British nationals on payrolls fell in the North East, Yorkshire and the Humber, East Midlands, West Midlands, East of England, London, South East, South West and Scotland. It increased in the North West, Wales and Northern Ireland.
The working-age benefit bill is set to reach £136.1 billion in 2026/27, up £49.6 billion in real terms since 2019/20, according to DWP caseload and expenditure tables.
Table 1. Change in payrolled employments by nationality and out-of-work benefit claimants by region since 2020
| Change in payrolled employments | Change in benefit claimants | |||
| Region | British | EU | Non-EU | Out of work |
| North East | -8,600 | +1,300 | +65,300 | +88,476 |
| North West | +1,700 | -14,100 | +223,900 | +279,054 |
| Yorkshire and the Humber | -18,400 | -14,100 | +146,100 | +216,407 |
| East Midlands | -23,100 | -20,500 | +155,400 | +168,761 |
| West Midlands | -32,000 | -22,500 | +220,300 | +256,937 |
| East of England | -29,400 | -25,100 | +196,400 | +197,212 |
| London | -26,500 | -171,100 | +465,200 | +407,629 |
| South East | -31,700 | -44,800 | +284,500 | +263,847 |
| South West | -6,000 | -22,800 | +130,800 | +148,750 |
| Scotland | -53,000 | -10,100 | +130,200 | +153,598 |
| Wales | +800 | -4,300 | +61,200 | +101,550 |
| Northern Ireland | +39,800 | -3,700 | +34,100 | n/a |
Source: CSJ analysis of HMRC payrolled employment data (January 2020 to December 2025) and DWP Stat-Xplore Benefit Combinations data (February 2020 to November 2025); comparable out-of-work benefit data are unavailable for Northern Ireland.
The report also identifies 3,369 “welfare hotspots” – collectively home to nearly 900,000 people, a population larger than Leeds – where out-of-work claimant numbers exceed half of the working-age population.
The hotspots can be explored on a new interactive map where viewers can enter their postcode and examine the scale of the welfare crisis.
Figure 1. Change in payrolled employments by nationality and out-of-work benefit claimants by region since 2020