On 17 July, Sir Keir Starmer’s new Labour government announced its plans for the first year of the new parliament, with growth and wealth creation the priority.

King Charles’ speech at the State Opening of Parliament included a total of 39 bills under a new legislative agenda which includes speeding up the delivery of ‘high-quality infrastructure and housing’ and nationalising railway operators.

Starmer’s agenda was dubbed a ‘monster wish-list’ by newswire Bloomberg, and since many of the measures could be inflationary investors will be concerned the Bank of England may feel it needs to hold back from cutting interest rates on 1 August as the market had anticipated.

GET BRITAIN BUILDING

The speech underscored Labour’s commitment to reignite the housing industry and put planning reform and housing supply at the forefront of its intentions.

Shares in housebuilders Bellway (BWY), Persimmon (PSN), Taylor Wimpey (TW.) and Vistry (VTY) caught a bid on hopes the setting of new delivery targets and a more streamlined planning process could provide the structure required to increase new home supply.

Ultimately though, it is the housebuilders who deliver new homes, not the government, while the re-branding of the green belt to the ‘grey belt’ will be contentious given the powerful lobbies who consider the green belt sacrosanct.

As Jatin Ondhia, chief executive of Shojin Property Partners, explained: ‘Announcing planning reforms and encouraging investment was necessary; however, now we need concrete and robust plans to meet housebuilding targets. Rhetoric alone won’t suffice - housing minister Matthew Pennycook has a long “to-do list”, and he must support the construction sector by mobilising the financial resources needed to realise these plans.’

Grainger’s (GRI) chief executive Helen Gordon said proposals to speed up housing delivery through reform of the planning system would ‘give housing providers, such as Grainger, greater certainty to invest and build homes across the country’.

‘Ensuring local plans are in place with local housing targets, and removing planning uncertainty for housing schemes that comply with local plans is a very welcome change and aligned to Grainger’s primary focus of housing delivery on brownfield land in urban centres with high housing demand,’ added Gordon.

Also voicing support for Labour’s planning and infrastructure priorities was Jonathan Murphy, chief executive of primary-care buildings investor Assura (AGR).

Murphy recognised ‘the potential positive impact this could have on our delivery of critical healthcare infrastructure by reducing the bureaucracy that can so often lead to project delays. The UK healthcare crisis continues to intensify, and this legislation can support Assura in delivering the essential, modern healthcare premises that local communities so greatly need.’

MORE RED TAPE FOR RETAIL & HOSPITALITY

Meanwhile, the new legislative agenda was a mixed bag for retailers and hospitality firms ranging from Frasers (FRAS) and Marks & Spencer (MKS) to Whitbread (WTB), with the radical-looking Employment Rights Bill to add to the regulatory burden.

This promises workers’ protection from unfair dismissal, but also the right to flexible working from day one and states that all adults should benefit from the minimum wage.

Labour also says ‘exploitative’ zero-hour contracts will be banned, a negative for Mike Ashley-controlled Frasers and the likes of Deliveroo (ROO), although the government is not saying employers can never use them.

The government also brought forward amendments to the Crime and Policing Bill, including adding legislation designed to ‘tackle retail crime’ by creating a specific offence of assaulting a shopworker and introducing ‘stronger measures to tackle low-level shoplifting’.

Tesco (TSCO) boss Ken Murphy praised this ‘early commitment from the government to protect shop workers and the inclusion of a standalone offence in the King’s Speech. Retail colleagues are the backbone of the everyday economy, and they deserve to feel safe at work.’

DEVIL IN THE DETAIL

The incoming government also confirmed its manifesto pledge to invest £8.3 billion to fund GB Energy, a publicly-owned company which will own, manage and operate power generation projects, although as with all such programmes the devil is in the detail.

Labour’s ambition to scale investment in wind and solar is laudable, but does not address the challenges of intermittency. Enshrining the National Wealth Fund in legislation was a clear signal of the party’s intent to mobilise much needed capital for green investments.

The new government also put forward a new Pensions Bill, which Tom Selby, director of public policy at AJ Bell, said would ‘put millions of people’s pension pots at the heart of the new government’s drive to boost investment in the UK and ultimately drive long-term economic growth.’

‘The claim that the measures in the Bill could deliver bigger pensions needs to be taken with a pinch of salt, as ultimately this will depend on the performance of your investments. It is, of course, possible that this package of reforms will result in better investment returns for members – but this is never guaranteed,’ concluded Selby. 

Disclaimer: AJ Bell referenced in the article owns Shares magazine. The author (James Crux) and the editor (Ian Conway) own shares in AJ Bell.

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