The first thing to say in answer is that although Mr Corbyn has momentum – no pun intended – it is unlikely that he will be able to test this with voters any time soon. Although there is disunity in the Conservative party, the risk that in-fighting could lead to a general election – and one that they wouldn’t currently win – is likely to keep would-be leadership challengers lurking in the shadows. Thus it is likely that, despite her recent travails, Theresa May will hang on until the next election in four-and-a-half years’ time – and indeed the bookie’s odds narrowly suggest that the next general election will not happen before 2022.
While the Conservatives may currently appear to be in chaos, this grace period will be helpful to them – first to get their act together, but also to elicit broader scrutiny of Labour’s policies, not least how they will be paid for. My sense is that as the true, unaffordable cost of Labour’s plans sinks in, their chances of winning the next election will diminish. Meanwhile, moves by Conservatives to soften their image could blunt the edge of Labour’s message. Take the energy price cap, for example. First floated by Labour, it has been enthusiastically adopted by Conservatives keen to prove their social conscience, and I suspect so-called One Nation Conservatism will gain strength in the years ahead to challenge Labour’s apparent moral high ground and pursue other industries felt to be ripping off the so-called Jam, or just-about-managing, families.
Thus the answer to our reader’s question is that while the threat of renationalisation isn’t in itself a reason to sell these shares, there is certainly growing cause for concern that the returns you can expect from them may come under pressure from a broader reassessment of the interaction of private finance and public infrastructure. This has already been amply demonstrated in the example of Centrica, which like me the reader holds, and it is no coincidence that the likes of National Grid, HICL and John Laing Infrastructure – also all held by the reader – are diversifying their asset bases overseas. Following their lead, I would suggest that readers with similar investments diversify their own portfolios so that such political risks don’t keep you awake at night.
