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The head of a major supermarket chain has issued a stark warning that the UK is on the brink of a “worklessness epidemic,” with a significant number of individuals opting to receive benefits instead of seeking employment.
Ashwin Prasad, who leads Tesco UK, expressed concerns about the increasing trend of people voluntarily remaining unemployed and relying on benefits.
At a conference organized by the Resolution Foundation think-tank, Prasad remarked, “We are inadvertently heading towards a silent crisis that is preventing millions from joining the workforce.”
He noted a noticeable shift over the past decade, highlighting that the potential workforce is not being fully utilized.
Prasad emphasized that this trend diverts resources away from sectors that could drive economic growth, as more of the national budget is allocated to support unemployment benefits.
Mr Prasad added his voice to warnings about the crisis of economic inactivity – with nine million people, or more than a fifth of the working age population, neither working nor looking for work – many of them due to long-term sickness.
Figures released last month showed that the number of universal credit (UC) claimants in Britain jumped by more than a million in 2025 in the biggest annual increase since the start of the pandemic.
It comes as the Government’s welfare spending continues to rise amid an ongoing backlash against tax hikes in Chancellor Rachel Reeves’s ‘Benefits Street’ Budget.
The number of UC claimants stood at 6.9 million when Labour won the General Election in July 2024, meaning it has since risen by 1.5 million.
Ashwin Prasad, the boss of Tesco UK (pictured), warned about an ‘epidemic’ of people who are out of work and on benefits
MPs approved a 3.8 per cent increase in benefit spending on Tuesday, which work and pensions minister Stephen Timms said ‘commits the Government to increased expenditure of £9bn in 2026/27’.
Mr Prasad, who became chief executive of Tesco UK last year, warned that rising costs were making it harder for businesses to hire and retain workers.
He added: ‘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 cannot afford to be a country that leaves the next generation to languish on the sidelines. A country that makes that kind of mistake is not going to be a country that finds ways to innovate, to grow its economy and improve its standing on the world stage.’Â
Labour has previously said it ‘inherited a broken welfare system and spiralling, unsustainable benefits bill’ from the Conservatives, and has undertaken reforms including tightening rules on who can claim UC.
The Government has said there will be a ‘rebalancing’ of UC from April, reducing the gap between what people get for being unemployed compared to long-term sickness.
Prime Minister Sir Keir Starmer has previously spoken out against people being ‘written off’ on benefits and ending up trapped ‘in a cycle of worklessness and dependency’.
Mr Prasad, who became chief executive of Tesco UK last year, warned that rising costs were making it harder for businesses to hire and retain workers
It comes as MPs have warned about rising energy costs, taxes and crime – which are compounding pressures ‘comparable to the pandemic’ for the high street.
Much of the pain is being caused by Labour’s policies, but the Business and Trade Select Committee cautioned that, unlike in 2020, there is no coordinated government response to ease the mounting problems.Â
It adds to evidence that British firms are struggling to survive under Labour, with a bleak report last month from advisory firm Begbies Traynor warning more than 67,000 companies were in ‘critical financial distress’.Â
Think-tank Resolution Foundation has even warned that a ‘zombie apocalypse’ of struggling businesses could be on the way. Â
Liam Byrne, chair of the business and trade committee, said: ‘High streets do not die by accident. If the government is serious about growth, it must set out a more coherent and ambitious plan for the businesses that make up so much of the UK economy.’
The report noted that small and medium enterprises (SMEs) account for 99.8 per cent of all UK businesses and ‘form the backbone of local economies and high streets’.
Last year’s raid on employer national insurance is hitting hard, with retailers estimating that the changes are costing them an extra £7billion a year while the hospitality sector has suffered 69,000 job losses, partly thanks to the measures.
On top of that, firms are having to cope with sky-high electricity costs, retail crime costing £4.2billion a year and the burden of late payments.
Death of the High Street: 38 shops are closing every day, according to a report by MPs
MPs cited figures from 2024 showing an average of 38 shops a day closing on Britain’s high streets.
They are calling for a series of reforms, including a clampdown on late payments, reforms to VAT and business rates, and targeted support with energy bills.
Mr Byrne said the evidence from firms ‘was stark’.
‘Many small businesses are now operating under pressures comparable to those experienced during the Covid pandemic but this time without an emergency support framework in place,’ he said.
‘SMEs are facing late payments, rising energy costs, increasing crime, a complex tax system and barriers to growth that are compounding rather than easing.
‘These pressures are not isolated; together they pose a real risk to business viability, high streets and economic growth.’
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