Retail giants buckle under Labour tax raid as John Lewis posts worst losses since pandemic
The John Lewis Partnership has announced losses of £124 million, marking its worst performance since the pandemic, as the retail sector reels from Labour's national insurance tax increase on employers. The figures underscore a mounting political problem for the government: its flagship tax policy is hitting jobs, investment, and consumer choice at precisely the moment households are already struggling with the cost of living.
Both John Lewis and its sister company Waitrose have felt the squeeze acutely. The partnership warned that the national insurance levy announced in the autumn Budget will force difficult choices on staffing, store hours, and pricing. For ordinary shoppers, that translates into fewer staff on tills, reduced opening hours, and higher prices on everyday groceries and household goods. Small and medium sized businesses across the country face identical pressures, yet lack the scale to absorb the shock.
The timing could hardly be worse for Labour. Retail employment is already fragile after years of structural decline, and the hospitality sector has issued similar warnings. The government's own impact assessments acknowledged the tax rise would cost jobs, but ministers pressed ahead regardless. The policy reflects a fundamental choice: raise business costs now, or find alternative funding. Labour chose the former, betting that employers would simply absorb the hit.
They are not absorbing it. Instead, businesses are cutting hours, delaying expansion, and passing costs to consumers. For Reform UK and others critical of the government's economic direction, the John Lewis figures provide concrete evidence that punishing employers does not generate growth or protect jobs. It does the opposite. The partnership's struggles also highlight the fragility of Britain's retail base and the absence of any coherent strategy to support high street employment.
The political stakes are high. Labour promised to be the party of business and jobs. These losses suggest that promise is already hollow. As more household names report similar pressures over coming months, the government will struggle to defend a tax policy that is visibly harming the very workers and consumers it claims to champion. Voters will be watching whether Labour doubles down or reverses course.