Politicians' passionate words about the need to provide a predictable legal framework for businesses and support green energy are forgotten in the face of public calls for immediate but costly state support.
So any form of energy or fuel company, whether they sell directly to the public or further up the supply chain, are examples of businesses that are at risk from government action. The same applies to broadband or telephone companies, mobile networks and, perhaps to a lesser extent, supermarkets.
In terms of specific threats if a Labour government is elected in the upcoming election, certain sectors are likely to be hit with further regulation, temporary tax increases, or both.
Top of the list will likely be privatized utilities, particularly water companies, some of which have balance sheets too strained to sustain large payments.
Banks have been targeted in the past, but Labour's recent announcement that it will not reinstate restrictions on City bonuses may signal a major change in attitude towards the banking sector.
Labour has signalled it is open to new thinking about the NHS, potentially including a shift from treating disease to preventing it, which could mean increased pressure on tobacco companies and perhaps alcohol companies and producers of food deemed unhealthy.
But the hospitality sector has come under huge pressure since the pandemic, with many pubs and restaurants struggling with rising energy and food prices, and adding fuel to this particular fire may prove unpopular with voters.
…and the companies and industries that could benefit
Governments have a complex relationship with business: big companies or entire industries are sometimes conveniently portrayed by politicians as “public enemy number one”, but ministers also know that businesses and their employees pay huge amounts of tax without which public services would cease to exist.
More mundanely, governments outsource vast amounts of work to private companies, from building tanks, planes and warships to providing computer systems to the public sector, and of course there are many outsourcing contracts for a wide range of services.
This is true regardless of which party is in power, so it is by no means easy to identify businesses or sectors that might particularly benefit from a Labor government.
That said, it can be surmised that Sir Keir’s Labour party may be less inclined to roll back net zero and green initiatives than Rishi Sunak’s Conservative party.
Companies involved in environmental improvements are therefore likely to be treated more favourably. Questor recommends several investment trusts that put money into green energy and environmental assets in general. Examples include Greencoat UK Wind, JLEN Environmental Assets and Impax Environmental Markets.
