UK Sleepwalking Into Joblessness Crisis, Warns Tesco Boss

The UK is facing a “quiet epidemic” of joblessness as millions of people remain out of work, according to Ashwin Prasad, the UK chief executive of Tesco.

Speaking at an event in London hosted by the Resolution Foundation, Prasad warned that Britain is “sleepwalking” into a long-term employment crisis, with far fewer people working than the economy could support. He criticised the government for “tinkering at the edges” instead of making bold reforms to help people back into jobs.

Unemployment at Four-Year High

Official data released last month shows the UK unemployment rate has climbed to 5.1%, its highest level in four years. More than 9 million people aged 16 to 64 are now classed as economically inactive, meaning they are neither working nor actively seeking employment.

This figure includes 2.9 million people aged 16 to 24, with almost one million young people not in education, employment, or training (NEETs)—a 26% increase compared with pre-pandemic levels.

Research by the Centre for Social Justice suggests that over 700,000 university graduates are currently out of work and claiming welfare benefits.

Growing Cost of Benefits

Prasad warned that the rising number of people out of work is putting increasing pressure on public finances.

“Instead of investing in areas of national life that stimulate growth, we are spending an ever-increasing proportion of our national income on out-of-work benefits,” he said.

While acknowledging that economic inactivity has “myriad causes,” Prasad pointed to a decade-long trend of people falling out of the labour market, worsened by political instability and prolonged economic uncertainty—particularly for lower-income households.

Government Action and Business Concerns

In December, the government announced an £820 million funding package aimed at helping young people move into work or training. However, Prasad argued that more decisive action is needed and called for closer collaboration between government and business.

He also suggested that rising regulation and higher employer taxes are making it harder for companies to hire.

“Our biggest expenditure is wages and salaries,” Prasad said, noting that even small changes in employer costs can have a significant impact on a business as large as Tesco.

Tesco’s Role and Pay Controversy

Tesco, the UK’s largest private-sector employer, has more than 300,000 employees across the UK and Ireland and operates over 5,000 stores.

The retailer faced criticism during the cost-of-living crisis after group chief executive Ken Murphy received £9.9 million in pay and benefits in 2024—more than 430 times the average Tesco worker’s salary. Prasad acknowledged the controversy but said Tesco had invested £1 billion extra in wages over the past five years.

Retail as a Pathway Into Work

Prasad emphasised that retail plays a crucial role in helping people enter or re-enter the workforce.

“We provide some of the most flexible work opportunities in the labour market,” he said, highlighting support for young people, parents returning after childcare, and carers re-joining employment.

As unemployment rises and economic inactivity grows, Prasad warned that failure to act decisively could damage the UK’s long-term competitiveness and leave an entire generation “languishing on the sidelines.”