Tesco’s UK chief, Ashwin Prasad, has warned that the nation is in danger of “sleepwalking into an epidemic” of joblessness, while taking aim at government policies that increase hiring costs for employers.
Mr Prasad said there had been a “clear, gradual change” over the past decade in people falling out of the workforce, saying there are “far fewer people in work than there could be” and calling for significant change from the government in how it tackles the issue.
“We have been sleepwalking into a quiet epidemic that is keeping millions of people out of work,” said Mr Prasad.
“My perspective from leading a major employer in this country is that far fewer people are in work than there could be.
“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. We cannot afford to be a country that lets the next generation languish on the sideline.”
Tesco employs around 300,000 people and is likely the largest private employer in the country.
Mr Prasad’s comments come as the UK unemployment rate currently sits at 5.1 per cent – the highest level since the tail end of the pandemic in January 2021.
The Bank of England has forecast it could rise even higher to hit the same peak as during mid-2020, reaching 5.3 per cent, while a recent survey of economists suggested two-thirds believed unemployment could rise up to 5.5 per cent.
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Speaking at a Resolution Foundation event, the Tesco chief said there were multiple reasons why joblessness had increased, but pointed to official forecasts which show that Britain will spend over £330bn on welfare this year, which the Office for Budget Responsibility predicts will grow to more than £400bn by 2030-31.
Labour have made a sustained push to get more people back into jobs, including plans for large scale welfare reform and altered rates within Universal Credit.
The UK CEO also suggested Tesco faced an outsized hit when the cost of employment rose – which includes increases in employer national insurance contributions and rising minimum and living wages requirements – as it has such a large number of staff on its books, noting the firm’s “biggest expenditure is the salaries and the wages” of employees.
Mr Prasad criticised regulation and increasing the costs to firms of bringing jobs to the economy, while hinting that they hampered the ability to hire even more people facing a diverse range of circumstances.
“Each time you add a new cost, money has to come from somewhere. In the past five years, we’ve already seen all sorts of new costs for labour, costs for energy and costs for regulation.
“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,” Mr Prasad added.
This week, Tesco announced 70 new convenience stores were set to open, including some which have taken over prominent sites formerly used by Amazon Fresh.
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