LETTER: Plan to distribute shares in part-nationalised banks is flawed

The proposal to mass distribute shares in the part-nationalised banks to every UK citizen now being considered by the Liberal Democrats is radical and innovative, but fundamentally flawed.

Anyone that believes this plan will produce a fully-engaged shareholder base spread among the citizenry is ignoring the experience of the demutualisation of building societies.

Many “investors” took the money and ran, while others stayed loyal but ignored the warning signs of impending disaster and got wiped out.

Of course, the banks now part owned by the government are a very different business proposition but transferring ownership directly to citizens, many who have a poor understanding of basic finance, is inviting trouble.

As we know commentary in the mainstream media on the subject of shares is often misguided at best and muddled at worst. There is much to be said for taking part ownership of businesses through acquiring shares quoted on public exchanges.

If one can acquire decent businesses that prosper at decent prices, hold the shares directly rather than in funds and products from banks, building societies and assurance companies, and ignore the cacophony of nonsense that emanates daily from the mainstream media, then one cannot other than do well.

KEVIN HEY

Castle Road, Colne