National Grid shares fall on report of Labour party's renationalisation plan

LONDON (Reuters) - National Grid shares fell more than 3 percent on Thursday after the BBC reported that Britain’s main opposition Labour party is preparing to announce plans to renationalise the utility.

FILE PHOTO: Electricity pylons are seen in London, Britain August 1, 2017. REUTERS/Neil Hall

The shares closed down 3.3 percent at 855.1 pence on Thursday, their worst day since the end of December.

Traders attributed the drop to the report, which they said detailed that the left-wing Labour party would release a policy paper on Thursday outlining the plan to transfer the utility back to public ownership.

The policy rekindled lingering worries among investors about potential radical changes to public policy if Labour won a general election.

The next election is not due until 2022 and there is no guarantee that Labour would win, but the deadlock over the nation’s chaotic exit from the European Union has increased the chances of a vote this year.

Among its other policies, the party has pledged to break up state-owned Royal Bank of Scotland if it got into power.

In a speech on Thursday, the Confederation of British Industry (CBI) director general Carolyn Fairbairn criticised proposals to renationalise parts of the UK’s infrastructure, utilities and public services.

She said it would cause profound harm to the country’s economy and hurt the people they are intended to help.

Reuters was not able to view the report because it had been removed from the BBC’s website. A BBC spokesman said the report was pulled after Labour leader Jeremy Corbyn delayed a speech he was due to make on Thursday announcing the policy.

A spokeswoman for company declined to comment and the Labour party was not immediately available for comment.

Reporting by Helen Reid; Additional reporting by Tanishaa Nadkar; Writing by Josephine Mason; Editing by Mark Potter and Alexandra Hudson