Autumn Budget 2025

Baroness Stedman-Scott Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, to be frank, I am not entirely sure where to begin. There is much to consider and even more to be concerned about. This Budget, at its core—in a deliberate political choice—is about welfare over work. We are asked to believe that this Budget strengthens the economy and supports working families, but, once you look past the presentation, a very different picture appears: rising inactivity, weakening incentives—a point made by my noble friend Lord Hintze—and a welfare system growing far faster than our economy can sustain. I hope noble Lords will forgive me if I focus my limited time on that core issue.

Politics is about choices, and the choices in this Budget are unmistakable. At every turn, the Government have chosen welfare over work. We on these Benches and, I am sure, all other Benches in the House are absolutely clear that help should be given to those who really need it, and should be given at the time that they need it. We see this most clearly in the decision to abolish the two-child limit. We are told this is an act of compassion. But compassion first requires honesty, and the evidence is clear: workless households are the strongest predictor of poverty. Removing the cap, which I have no doubt is well intentioned, will mean more children growing up in a family where no one works, at a time when the economy has already shed 180,000 payroll jobs in the past year and when labour supply growth is falling.

What makes the choice all the more striking is that Labour once knew this. As my noble friend Lady Coffey already said, the Chancellor herself argued that keeping the cap was the right thing to do. She did it so strongly that colleagues were suspended for disagreeing with her. People respond to incentives, and the incentives in this Budget are in danger of pointing people firmly away from work. Many on welfare now receive around £2,500 a month, which is more than someone earning the minimum wage takes home. Meanwhile, the Chancellor’s inflammatory policies and tax rises are stifling take-home pay for those in work.

Additionally, new analysis shows that a jobless family on combined benefits will now take home £18,000 more each year than a working family with the same number of children. Why would you go to work? We are in danger of creating lifestyles that are unsustainable through paid work. When the system pays more not to work than to work, people are not being irresponsible but responding to the incentives that the Government have created. Their choices are rational; the Government’s choices are wrong.

This is not a strategy for growth or a route to higher living standards. It is the story of a country slowly drifting into deeper dependency and a Government content to let that drift continue. We want resilience, not reliance. We want independence, not dependence.