New Times,
New Thinking.

  1. Election 2024
  2. Economy
14 September 2017

John Lewis is the model British firm – so can Brexiteers please explain why it’s suffering?

John Lewis looks after its staff and has a proud British history. It's been struggling since Brexit. 

By Julia Rampen

After Brexit, many on the left argued that the surprise result had revealed a progressive blindspot. Fears about immigration and the European Union, so the argument went, were actually a profound reaction to the driving down of wages by low-paid immigrants, as well as a wider reaction to the forces of globalisation. 

As far as the model post-Brexit company goes, then, John Lewis is perfect. It’s a British firm with a proud history, but it is also a company that looks after its staff. All 84,000 permanent staff are partners in the business, with a stake in the John Lewis department stores, Waitrose supermarkets and other assets, and receive a generous cash bonus. Theresa May might have shied away from the idea of workers on boards, but John Lewis already does it. 

So the fact John Lewis’s profits before tax were down 53.3 per cent in the six months to 29 July 2017 should worry Brexiteers. While John Lewis said the slump in profits was partly down to an internal shake-up, it also blamed “inflationary pressures driven by exchange rates and political uncertainty”. 

Sterling took a nose dive on 24 June 2016 and has not really recovered since. The Lexiteer theory is that more expensive imports should encourage manufacturing at home. But this did not happen the last time sterling took a tumble, after 2008, and at the moment, the most obvious impact of weaker sterling is rising prices. In an age of specialisation, even domestic manufacturers rely on complex supply chains, with individual components imported from abroad. In August, UK inflation jumped to 2.9 per cent – a four year high. 

Political uncertainty, too, seems to be affecting our buying behaviour. While consumer confidence recovered after the Brexit vote, it has since drifted back downward, according to the GfK survey. House price growth is slowing. Some may celebrate this fact, but a sudden crash is unlikely to benefit anyone except wealthy property investors who can afford to bide their time. 

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

John Lewis said in its latest results that it has continued to increase pay, to £8.87 an hour for non managers – £1.37 more than the government’s own touted minimum wage hike. It would be an odd irony of Brexit if the firms that get squeezed the most are the ones apparently most in line with the ideals of the Brexiteers in the first place. 

Content from our partners
Peatlands are nature's unsung climate warriors
How the apprenticeship levy helps small businesses to transform their workforce
How to reform the apprenticeship levy