UK sleepwalking into joblessness epidemic, Tesco boss warns
The UK is “sleepwalking into a quiet epidemic” of joblessness with millions of people out of work and on benefits, the boss of the nation’s biggest supermarket chain has warned.Ashwin Prasad, who runs the UK arm of Tesco, said he believed far fewer people were in work than should be and that taxpayers were spending “an ever increasing proportion of our national income on out-of-work benefits”.The rate of unemployment sat at a four-year high of 5.1%, according to official data released last month.Prasad, who took the role of UK chief executive last year, said there had been a “clear, gradual change” over the last decade of people falling out of work.
He called on the government and businesses to work together to tackle the issue, arguing that it was damaging the UK’s standing on the world stage.“We cannot afford to be a country that lets the next generation languish on the sideline,” Prasad said at an event in London hosted by the Resolution Foundation, a thinktank, adding that the government must stop “tinkering at the edges” of the problem and make bold changes to get more people into work.More than 9 million people aged 16 to 64 in the UK are classed as economically inactive, meaning they are not actively looking for work or available to start a job.This includes 2.9 million people aged 16 to 24, with almost a million young people not in education, employment or training, a 26% increase from pre-pandemic levels.
Analysis by the thinktank the Centre for Social Justice (CSJ) suggests more than 700,000 university graduates are out of work and claiming welfare benefits.In December, the government announced an £820m funding package to help more young people into work or on to learning schemes.Prasad said there were “myriad reasons” for many people being economically inactive and that life had been “incredibly challenging” for lower-income households for a sustained period of time, saying they had been at the “sharp end of a prolonged era of political instability and economic uncertainty”.But he added: “My perspective from being a major employer in this country is that far fewer people are at work than they could be.This means instead of investing in parts of national life that might stimulate investment and growth into the wider economy, we are spending an ever increasing proportion of our national income on our out-of-work benefits.
“We have been sleepwalking into a quiet epidemic that is keeping millions of people out of work,” Prasad said,Prasad did not say what out of work benefits he was referring to in his claims,The government has said the number of people claiming health-related benefits that enable them not to work has increased by 800,000 since 2019-20, while the number claiming a personal independence payment (Pip) to help cover the additional living costs of their disability is forecast to double this decade from 2 million to 4,3 million,However, Pip is not an out-of-work benefit, and economists have pointed out that overall out-of-work benefits have not risen.
Some of the increases have been due to a higher state pension age increasing the number of “non-pensioners” claiming sickness benefits who would otherwise be on the state pension,The UK’s Tesco boss also implied that the government’s increases in regulation and employer taxes were harming businesses’ ability to hire more people,“Our biggest expenditure is the salaries and the wages of our employees,” Prasad said, adding that any change to this cost had a large effect on Tesco as it was such a big employer,Tesco, the UK’s dominant grocer, is the largest private-sector employer in the country,It has more than 300,000 employees across the UK and Republic of Ireland and more than 5,000 stores.
It was accused of giving struggling workers a “slap in the face” when its group chief executive, Ken Murphy, received £9.9m in pay and perks as profits soared during the cost of living crisis in 2024.The payout meant Murphy earned more than 430 times the average pay at Tesco that year.Prasad acknowledged Tesco was in “good financial health” but said the highly profitable retailer had invested an extra billion pounds in wages over the past five years.He said retail was one of the best sectors in helping people into work.
“We provide some of the most flexible work opportunities in the labour market, supporting people to enter the workforce for the first time or re-enter after they’ve taken time out for either childcare or caring,”A government spokesperson said: “We share the ambition to get more people into work and are taking decisive action - investing £1,5bn in work, training and apprenticeships, and supporting 300,000 people with disabilities into employment through Connect to Work,“We’re working hand in hand with employers through Sir Charlie Mayfield’s Keep Britain Working Review and Alan Milburn is investigating the root causes of youth worklessness,“Through our Jobs Guarantee we are helping young people find paid work placements, and we are grateful to the dozens of employers who have already expressed an interest in the scheme - including Tesco.
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