Capital spending
Labour has in the past tended to invest in public infrastructure and has indeed already made some promises in this arena.
And companies build infrastructure, not governments. Investment into hospitals, transport, water, the electricity grid and broadband could all be coming soon — businesses like Kier Group could be well placed to benefit from large public sector contracts. Serco, which markets itself as a leading provider of public services, could also do well.
Housing remains a hot topic, and Labour may consider incentivising housebuilders. Vistry Group (formerly Bovis Homes) places an emphasis on affordable mixed tenure homes, and given the dire lack of social housing, Mears Group could also be a prime beneficiary of future policy. However, others including Persimmon and Barratt Developments may also gain from any broad-based revival of state support, such as Help to Buy.
Given the general geopolitical instability, Starmer has also promised to increase UK defence spending to 2.5% of GDP ‘as soon as resources allow.’ Titans such as BAE Systems or Babcock could be winners of this policy.
Increased investment in the NHS has also been pledged — while drugmakers and household names like AstraZeneca and GlaxoSmithKline may benefit, lesser-known names may be more interesting investments. In particular, medical device manufacturer Smith & Nephew could see increased demand — as could private healthcare provider Spire Healthcare, which collaborates with more than 8,000 experienced consultants, who could help get waiting lists down.
Contracting private healthcare to help solve the crisis may be ideologically difficult but would also be a practical solution to the longstanding problem.