Autumn Budget 2025

Baroness Thornton Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Thornton (Lab)]

My Lords, I am pleased to be participating in today’s debate on the Budget. I regret that the noble Lord, Lord Leigh, has continued to vilify—unfairly—my right honourable friend the Chancellor. Last Wednesday, the Chancellor delivered a Budget that eases the cost of living, reduces national debt, brings down NHS waiting lists and lifts nearly half a million children out of poverty, building on the progress made to date on delivering our plan for change with this Labour Budget.

I intend to speak about two matters. The first is the contribution of co-operative social enterprises and mutuals to the regeneration of our economy. I remind the House that I am a Labour and Co-operative Member of the House and refer noble Lords to my register of interests as founding chair of Social Enterprise UK and a senior associate of Social Business International. Secondly, I wish to raise a couple of questions on the impact of the Budget on women.

The manifesto on which my Government were elected included a commitment to supporting a diversity of businesses to tackle the growth in the economy. The Co-operative Party is committed to doubling the size of co-operatives in the UK. It will be clear that I am very keen on the growth of businesses that trade for a social purpose, but to achieve this will require change in business development support across government.

This was the first time in a generation that co-operatives were mentioned in a Chancellor’s Budget speech. I hope that the proper review of business support for co-ops will help drive this ambition forward. Will this be extended to social enterprises and mutuals?

Co-operatives and social enterprises are proven to be productive, resilient, long-lasting and equitable. They provide business models that do not extract wealth from local places and hoard power in the hands of shareholders. An example of that is the profit-gouging of companies making excess profits in providing residential care for our most vulnerable young people. At the moment, there is a lack of appropriate and encouraging legislation, regulation and access to financial measures and development support or education for social enterprises and co-operatives. I raised in my contribution to the King’s Speech debate last year that we see scattered regulation in this sector—the DBT, DCMS and the Treasury being the main regulators. Financial mutuals, for example, are excluded from the business department’s call for evidence on co-op growth because they fall under the Treasury’s remit. Will the Treasury consider launching an equivalent review on their contribution?

I turn briefly to the impact of the Budget on women. As my noble friend the Minister will be aware, women face structural inequality throughout their lives, and policy impacts differently on men and women. Some positive steps were definitely taken for women, but more ambition is needed, as the Women’s Budget Group said, and I agree. Was an equality impact assessment carried out on this Budget, and if not, will this happen for the future? Was there an assessment, for example, of the impact on women of freezing personal income thresholds? Is it the case that the majority of those who earn under the personal allowance tax band are women and freezing it means that more women will be paying income tax for the first time? Because women have lower incomes on average, does this mean that women will lose a greater proportion of their incomes through the freezing of this income tax threshold? I would really appreciate clarification on this from my noble friend.

--- Later in debate ---

[Lord Pitkeathley of Camden Town (Lab)]

My Lords, I first acknowledge the maiden contribution of the right reverend Prelate the Bishop of Portsmouth, who I welcome to the House, as well as the rare privilege of speaking in the same debate as my noble kinswoman Lady Pitkeathley.

[Baroness Thornton (Lab)]

You could have said. “My mum”.

[Lord Pitkeathley of Camden Town (Lab)]

I could have said, “My mum”, you are right.

The headroom has pleased the markets. The currency is doing better and the Chancellor, despite noises around her, will feel that we now have a stable platform to build on. However, as I listen to today’s debate, in and outside the Chamber, I sense a direction of travel that leads me to a simple challenge. If one’s preferred response to our current position is essentially, “Well, I wouldn’t start from here”, then one may be missing the salient point: here is the only place to start from—this moment, these constraints and this inheritance, not the one we wish we had. If we get the macro picture wrong, we all know what follows, and within the limits the Chancellor has to work with the real question becomes: what else does one actually, workably, do?

Far too often, criticism without responsibility is treated as contribution. But if we are genuinely interested in solutions, then our starting point must be the real fiscal and political constraints in front of us, not a fantasy world where money is infinite, trade-offs do not exist, and the economics politely step aside while ideology enjoys itself. We all know the refrain: “Everyone needs to do their bit”, and the reply, “Yes, but why does one of them have to be me?” We all agree that we need new infrastructure and new public commons, and in the next line: “Yes, but does it absolutely have to be near me?” When we discuss tax reform, welfare reform or planning reform, we hear: “Yes, but must it really apply to people like me?” There is always a constituency for change in general and an equal constituency against change in particular.

Against this backdrop, building a strong economy is vital, so the projected increase in growth from 1% to 1.5% is welcome. Having wages rising is welcome and productivity, the eternal British riddle, seems finally to be turning, although I acknowledge that the OBR largely seems to have given up on forecasting significant gains. With likely losses in professional jobs as AI adoption accelerates, that caution is understandable.

Lower inflation and the hope of lower interest rates is a relief. The focus on helping high-potential firms to scale and stay is essential; for too long, we have been the R&D lab for the rest of the world. The entrepreneurship policy paper published alongside the Budget, which includes increasing limits for venture capital trusts and the enterprise investment scheme, more British Business Bank capital going to key industries and departments using procurement to promote innovation, is more welcome news.

Tax cuts for high-street businesses are also welcome and should, once the complexities around reliefs per hereditament—and, yes, I do know what a hereditament is—are understood, reduce bills for many, although concerns remain about how larger payers will react and the coinciding business rates revaluation inevitably makes life harder for some. And London, once again, is being asked to shoulder an ever-increasing share of the burden as if this had no consequence for the wider economy.

Two difficult truths also deserve stating. First, Brexit and austerity have been economically unhelpful. Secondly, taxing wealth a little more like we tax work is not radical; it is overdue and fair. Where today’s debate has been useful is where it has been rooted in where we actually stand. The question is not “What is the perfect solution?” but “What is the best responsible path from here?”, because here, with all its imperfections, is where the British economy lives, and it is the only place from which we can build the future we say we want. That, it seems to me, is the future the Chancellor clearly has in her sights.

Autumn Budget 2024

Baroness Thornton Excerpts

Monday 11th November 2024 Lords Chamber

[Baroness Thornton (Lab)]

My Lords, I am very pleased to be able to participate in today’s debate. I congratulate the noble Lord, Lord Booth-Smith, on his maiden speech; he is not in his place right now but I am sure that the noble Lord, Lord Dobbs, will pass on those good wishes.

The problem with having been on the Front Bench for the best part of the last 16 years is how rarely one has been able to participate in these great set-piece debates. I thank my noble friend the Minister, who did his usual brilliant job in opening the debate today.

After every Budget, I always look to see what the Women’s Budget Group has to say about its contents. In recent years, in government the party opposite has not scored too well at all, it has to be said. The WBG’s gendered impact assessments have become increasingly important. I invite my noble friend to join me in congratulating the group on the important work that it does.

The first Labour Government Budget in 14 years is very important and marks a shift in the UK’s economic direction, with more resources for public sector spending and investment. This change of direction is welcome news, particularly for women, who have borne the brunt of the austerity-driven public service cuts since 2010. I agree with the Women’s Budget Group when it says that the Budget offers “some promising green shoots” for women through

“additional investment in the NHS and schools and … additional spending for local government and social care. Women and those they care for rely more on these services and are more likely to work in them”.

Indeed, the above-inflation increase in the national living wage was very welcome and will particularly benefit women, who make up the majority of low-paid workers.

I hope that we can look forward to the child poverty review, led by my right honourable friend Liz Kendall, and the spending review next spring, as an opportunity for the Chancellor to build on what she has started with this Budget. I seek assurance from my noble friend the Minister that this is but the first step in helping the poorest in our society, and those women.

I turn to early years provision, as mentioned by the noble Lord, Lord O’Neill. If my great friend June O’Sullivan, chief executive of the over 100 year-old social enterprise, the London Early Years Foundation—which, of course, provides the nursery here in Parliament—says that she is concerned about some aspects of the Budget’s impact, then so am I.

Childcare is part of our national infrastructure; without it, many people simply cannot work. Social enterprises, charities and small businesses running nurseries, whose largest cost is staffing, may be taking a hit from this Budget. This will have a detrimental effect on the 28,000 nursery owners. Given the Government’s commitment to getting people back into the workforce, can my noble friend help me in squaring this circle? We need sustainable childcare, of course, to get people back to work.

When my right honourable friend Bridget Phillipson said that early years education is “more than just childcare” and is about giving every child the “best start in life”, it was a profound moment of recognition of investment in early years. Given the effectiveness of early years professional development programming, giving practitioners the skills they need to help our young, can we have some reassurance that there is a commitment to continue to fund this work post March 2025 and into the future, in the light of the commitments the Government have made? If my noble friend the Minister does not have this information, I would be happy for a letter to be placed in the Library.

This leads me to my last point, which concerns the social enterprise sector providing public services such as healthcare, social care and children’s services. The Department of Health and Social Care, which is responsible for this, said: “In line with precedent from the Health and Social Care Levy, the Department of Health and Social Care is working through the implications of the Chancellor’s tax announcements with the Treasury. We hope to provide further information soon”. The last time this happened, it came good for social enterprises and charities. I hope it will do so this time, too.

Working From Home: Public Sector Productivity

Baroness Thornton Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Livermore (Lab)]

This Government have exactly the same policy in terms of civil servants working from home as the last Government: civil servants should be in the office for a minimum of 60% of the time. That is unchanged and those figures will of course be published in exactly the same way. The noble Baroness said that working from home reduced productivity: that is not actually the case, according to many studies. I read one from the IMF recently that said that the positive and negative effects of working from home roughly offset each other, generating no net productivity impact.

[Baroness Thornton (Lab)]

Would my noble friend like to comment on the fact that, as a result of the pandemic, disabled people have been able to access work and all sorts of other things—like this House—more than they had previously? I hope that the Government will factor into their examination of this the fact that there are absolutely positive benefits of working from home for those with disabilities.

[Lord Livermore (Lab)]

I 100% agree with my noble friend. Most of the studies that have emerged so far on this subject suggest that there are very positive labour supply impacts of working from home. They particularly apply to those with disabilities who do not have to commute to the workplace and have their home working environment already adapted to their needs. They also apparently apply to those with childcare responsibilities coming back into the labour market.