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.

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[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.