Trick or treat from Killik & Co – which companies could be set to benefit from the Budget?

In the run-up to the Budget tomorrow, savers and investors will be avidly watching rumours around how tax and pensions might evolve. Also, amid Keir Starmer’s warnings of ‘painful’ changes, we’re expecting some challenging news. But investors will be looking for treats in the Halloween Budget too. 

In the following analysis, Rachel Winter, Partner & Investment Manager at wealth manager Killik & Co, outlines how some of the potential policies in the Budget could be good news for UK stocks.

Bulldozing through red tape

Labour has been clear since coming into Government that they want to get Britain building. This would require the Chancellor to cut red tape and make the process of building quicker and easier. Labour has set a goal of building 1.5mn homes over the course of the parliament. To do this they will need to pull on several different policy levers, including the reclassification of land and streamlining of the planning application process. This could reflect well on housebuilders, including the likes of Persimmon and Taylor Wimpey.

Cheers to that

Since Covid, the hospitality sector has benefited from government support, including a 75% reduction in business rates – but that is currently due to end in April 2025. A policy that would raise the spirits of the sector would be to extend the 75% reduction in business rates. This could lead to more than just a raise of the glass – we may see a positive impact for listed pub and restaurant companies.

Powering up profits

Labour has already started work on its pledge to make Britain a clean energy superpower, with its decision to locate the headquarters of the new public energy firm, GB Energy, in Aberdeen. There remains work to be done on the details, and some of this could come in the Budget. If GB Energy does what Labour wants it to do, it should complement domestic energy companies such as SSE rather than acting as a competitor. SSE could play a pivotal role in UK energy investment and has already been very open about its ambitions to co-invest with GB Energy.

A shot in the arm

Arguably the UK’s most successful company, AstraZeneca was the first FTSE 100 company to hit a value of £200bn. The Conservatives had previously promised the company a £65m grant but Labour announced possible funding cuts in the summer. The grant has been earmarked for AstraZeneca’s vaccine-manufacturing site in Merseyside, and the company has been upfront about the fact that it may move production overseas if the grant is withdrawn. If the government decides to keep funding the £450m project, this could be a big boost for one of the UK’s standout companies and a confidence boost for British businesses in general.