Government must choose wisely to ensure bail-out benefits taxpayers

It appears that the government now has two paths from which to choose with regard to British banking – either to buy considerable stakes, then completely nationalise the banks, or to buy enough shares as new issue to recapitalise the business. If it nationalises them, as many in old Labour would prefer, it greatly loads the public-sector finances and then, if previous nationalised industries are a model, loses a lot of money on them.

If it just takes a share issue, assists in putting in decent and competent private management then waits until share price recovers, it can recover its original stake, dividends and profit on the rising share price. Since the government would be buying in at a very low price, even a modest doubling of that price would bring many billions from the market. To ensure market confidence, the government must state its withdrawal strategy.

BRUCE D SKIVINGTON
Pairc a Ghlib
Gairloch, Wester Ross

It is nonsense to suggest that Iceland's problems are a "catastrophe for those who believe that Scotland is a viable entity" (your report, 10 October).

Iceland's population is 320,000, or one-sixteenth that of Scotland. Scotland should be compared to similar sized countries, like Norway, Denmark, Finland and Ireland, which have a higher GDP per capita and a higher quality of life than the UK. This, I confidently predict, will still be the same during and after this recession.

These economic problems are to do with how well a country manages its financial policy and have nothing to do with its size.

THOMAS MURRAY
Cairns Crescent
Perth

I am amazed at the short memories of some of the British electorate who are praising Gordon Brown for rescuing the world from the clutches of financial catastrophe.

Here is a man who sustained the British economy with some of the highest personal taxation on record. He has limited the freedoms of British citizens in the guise of anti-terror measures, but has failed to curb the excesses of the financial institutions, thereby contributing to our current woes.

BOB MacDOUGALL
Oxhill
Kippen, Stirlingshire

We are indebted to The Scotsman for pointing out that the £500 billion the government has spent bailing out the banks could have paid for four-and-a-half NHSs or a similar number of Iraq wars (your report, 9 October).

Therefore, it is a nonsense to deny cancer sufferers life-saving drugs on the basis they cannot be afforded – it is because the government chooses to spend our money on other "priorities".

Gladly, Tony Blair did not realise he had enough money for another three-and-a-half foreign invasions.

MICHAEL N CROSBY
Muiravonside
By Linlithgow, West Lothian

David Maddox has got things really mixed up when he says that the collapse of Icelandic banks is a blow to Scottish independence (your report, 10 October). Icelandic banks rode the credit boom successfully for years until the financial implosion in the United States and Britain brought them down. Despite that, in two to three years' time with the profits Iceland made from the credit boom, their cheap energy and massive natural resources, Iceland will still be a wealthier country than the US or Britain.

GEORGE LESLIE
North Glassock
Fenwick, Ayrshire