Stonehouse had a Trade Union upbringing and joined the Labour Party at the age of 16. He was educated at Taunton's Secondary Grammar School, Southampton and the London School of Economics. Stonehouse married Barbara Smith in 1948. They had three children. An economist, he became involved in co-operative enterprise and was a manager of African co-operative societies in Uganda 1952-54. He served as a director 1956-62 and president 1962-64 of the London Co-operative Society.