Tesco Chief Issues Stark Warning Over UK Joblessness Epidemic
Tesco's UK chief executive, Ashwin Prasad, has delivered a stark warning that Britain is in danger of "sleepwalking into a quiet epidemic" of joblessness, while launching a pointed critique of government policies that he claims are driving up the cost of employment for businesses across the nation.
"Far Fewer People in Work Than There Could Be"
Speaking at a Resolution Foundation event, Mr Prasad highlighted what he described as a "clear, gradual change" over the past decade, with increasing numbers of people falling out of the workforce. "My perspective from leading a major employer in this country is that far fewer people are in work than there could be," he stated emphatically.
The Tesco boss, who oversees approximately 300,000 employees in what is likely the UK's largest private sector workforce, called for significant governmental change in how the issue is tackled. "This means that 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 out-of-work benefits," he argued. "We cannot afford to be a country that lets the next generation languish on the sideline."
Unemployment Forecast to Rise Sharply
Mr Prasad's sobering assessment comes as official data reveals the UK unemployment rate currently stands at 5.1 per cent – the highest level since January 2021, during the tail end of the pandemic. Forecasts paint an even bleaker picture:
- The Bank of England predicts unemployment could rise to 5.3 per cent, matching the peak seen in mid-2020.
- A recent survey of economists indicated that two-thirds believe unemployment could climb as high as 5.5 per cent this year.
Mr Prasad pointed to official projections showing Britain will spend over £330 billion on welfare this year, with the Office for Budget Responsibility forecasting this figure will balloon to more than £400 billion by 2030-31.
Condemning the Rising Cost of Employment
The Tesco chief was particularly critical of policies that increase the cost of hiring and retaining staff. He noted that for a company of Tesco's scale, the firm's "biggest expenditure is the salaries and the wages" of its employees, making it especially vulnerable to rising employment costs.
These costs include increases in:
- Employer National Insurance contributions
- Minimum wage requirements
- Living wage mandates
"Each time you add a new cost, money has to come from somewhere," Mr Prasad explained. "In the past five years, we've already seen all sorts of new costs for labour, costs for energy and costs for regulation."
He argued that such measures hamper the ability to hire more people, particularly those facing diverse circumstances. "We [the retail sector] 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," he added.
Contrasting Expansion Amidst Warnings
In a notable contrast to his warnings, Tesco announced this week that it plans to open 70 new convenience stores, including some taking over prominent sites formerly occupied by Amazon Fresh. This expansion highlights the complex landscape where businesses continue to grow while simultaneously grappling with rising operational costs and economic headwinds.
Mr Prasad's comments represent one of the most forceful interventions from a major business leader on the state of the UK labour market, framing joblessness not merely as an economic statistic but as a gathering national crisis requiring urgent attention and policy reform.
