Britain is heading towards a worklessness crisis that risks funnelling millions more people on to benefits, a senior Tesco figure has warned.
Ashwin Prasad, the supermarket’s UK chief, said the trend poses a threat to economic growth, arguing that rising numbers of people are choosing welfare instead of employment.
Tesco, one of the country’s largest private sector employers with around 300,000 staff, is constantly trying to draw new people into the workforce.
But Mr Prasad said the pool of available talent is tightening as more individuals fall out of work and on to support.
Speaking at an event hosted by the Resolution Foundation, Mr Prasad said: “We have been sleepwalking into a quiet epidemic that is keeping millions of people out of work.”
He added: “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.”
Mr Prasad pointed to official projections showing the UK is expected to spend £330billion on welfare this year, including £83.1 billion on sickness and disability support, which he indicated could not continue indefinitely.
The Tesco boss has warned a growing welfare bill leaves less for investment
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PASpending on welfare is expected to keep climbing over the rest of the decade.
Official forecasts from the Office for Budget Responsibility show the total benefits bill rising from £315billion in 2024 to 2025 to £406billion by 2030 to 2031.
The figures suggest costs will increase almost every year, reaching:
- £333billion in 2025 to 2026
- £352billion in 2026 to 2027
- £362billion in 2027 to 2028
- £373billion in 2028 to 2029
- £389billion in 2029 to 2030
The British job market grows harder to navigate | GETTY
He called on ministers to ease the pressure of regulation on employers, arguing that companies such as Tesco need room to keep driving growth across the economy.
“I believe this Government does recognise that something needs to be done, and quickly,” he said.
The Tesco executive also pointed to the work of Sir Charlie Mayfield, the former John Lewis chief, who carried out a Government backed review last year into how to keep more people in employment.
Sir Charlie has previously warned that businesses could be forced to find £6 billion every year to tackle Britain’s growing crisis of health related inactivity.
Mr Prasad said companies must be part of the answer. He said: “We believe businesses like ours have a moral duty to contribute, and the Government has a critical role to play here too.”
There are now 2.8 million working age people who are not even searching for employment because of long term health problems.
While Mr Prasad stopped short of pinpointing a single cause, he said the direction of travel over the past decade was unmistakable.
“Clearly, there are myriad reasons for this, and thankfully, I’m not a politician, so I don’t need to stand before you and pretend I know precisely why it’s been happening.”
At the same time, the number of young people outside both work and education has climbed to almost one million.
A separate investigation into the growth of youth inactivity is being led by Alan Milburn, the former health secretary, who has been tasked with examining why the problem has intensified in recent years.
