Universal Credit crisis deepens as fewer than one in three claimants look for work Labour accused of presiding over “perfect storm” of welfare dependency.
New figures have revealed that fewer than a third of Universal Credit claimants are actively seeking employment, fuelling accusations that Labour’s approach to welfare is driving a surge in worklessness.
The Department for Work and Pensions (DWP) said only 31 per cent of people on the benefit are classified as “searching for work”. Before the pandemic in early 2020, the figure was 52 per cent. The steep fall has coincided with a sharp rise in long-term sickness claims, many of which have left people permanently outside the labour market.
Despite promising to rein in costs, Keir Starmer has so far failed to deliver. His pledge to scale back the Universal Credit supplement for those on long-term sickness was abandoned after a rebellion from his own Left-wing MPs.
Spending on health and disability benefits for working-age adults is forecast to hit £75.7 billion by the end of the decade. Experts warn the burden could become unsustainable before the current Parliament is out.
Starmer’s ‘perfect storm’
Sir Iain Duncan Smith, the former Conservative leader and architect of Universal Credit, said Labour’s policies had created a “perfect storm” by loosening access to sickness benefits while making it harder for businesses to take on new staff.
“A lot of people have discovered how to get out of the requirement to work, which is that you go and claim you have depression or anxiety,” he said.
“But if people are depressed, they’ve got to get into work. We shouldn’t let them sit and do nothing.”
He added that Labour’s tax rises and new employment rules were choking job creation. “The one thing you used to be able to do with people coming back into work is start them on part-time jobs and then work them up, but businesses aren’t hiring any more for part-time work because of the tax changes,” he said.
“She’s now made job creation so difficult that jobs are going. They have got themselves into a complete and utter mess.”
‘Benefits safety net has turned into a trap’
Helen Whately, the shadow work and pensions secretary, accused Labour of weakening the economy and trapping millions of people in dependency.
“The benefits safety net has turned into a trap,” she said. “Welfare urgently needs reform. That’s why Keir Starmer’s weakness on welfare is a disaster for the country’s finances and for all the people who end up living on benefits rather than working.
“Getting people off benefits and into work is a moral and economic imperative, and the country shouldn’t have to wait until the next election for action.”
Whately said Labour’s refusal to tighten eligibility for low-level mental health claims was shutting people out of the workplace even though “being in work is usually better for mental health”.
The latest data show that six in ten Universal Credit claimants now face no requirement to seek a job. That group grew by a third in the 12 months to February 2025.
