Leading Article: Suddenly, Britain has become a nation of exuberant shareholders

IS MARGARET Thatcher's famous dream of a great British share-owning democracy about to become reality under a Labour government?

Certainly something strange has been happening to the stock market, and something even more dramatic has been happening to many of us. Although the Thatcher and Major governments widened share ownership through a series of highly popular privatisations, most of us remained at best simple "Sids" - essentially passive investors who would hang on to one or two stocks. Buying even blue chips or unit trusts, let alone making more speculative plays, remained a matter for the wealthy, brokers and a handful of spivs. The gush of shares from the demutualisation of institutions such as the Halifax and the Norwich Union created millions more shareholders, but again did little to alter the mentality of the British towards the stock market. People felt they were getting along fine with their savings tucked away in the bank or building society.

Now we find that Sid has suddenly metamorphosed into a modern-day El Cid, militantly entering the stock market to the astonishment of all. Share buying has increased by about 60 per cent in a few weeks. The British have always been comfortable with the notion of gambling, but still, the delighted brokers have never seen anything like it. What is more, when Sid cashes in his utilities, he is veering towards the glamorous end of the market, happily investing money in those dot.com companies that are very young, with little track record, have never made a profit and which, the Financial Services Authority warned yesterday, are volatile and illiquid. In making that warning, they were echoing the famous words of Alan Greenspan, Chair of the American Federal Reserve, about "irrational exuberance" in the markets. That was three years ago; since then, as many investors have noted, the markets have risen 50 per cent.

But perhaps it is not so irrational. Sid will have seen the return on his instant access account fall to 1 or 2 per cent. There is a revolution on the high street, which has seen sensible staples - even Halifax, Sainsburys and Marks and Spencer - languish, while shares in Hyder, Pennon and the other water companies collapse.

One notable exception, however, is BT, which has been a vigorous performer. This may have given Sid a clue. For Sid cannot fail to have noted the dramatic changes that telecom and Internet technology is making to our lives, and, more to the point, the furiously rising prices of shares in new firms with unfamiliar names like 365 (up 60 per cent in a week), ARM (up 500 per cent since April) and Global.net (up 100 per cent in a day). Not all of the dot.commers will make it, of course, but in the short-term, there is money to be made by cleverly dipping in and out of the market. In the long-term, chosing the handful of eventual winners in the Internet gold rush will make fortunes.

Irrational exuberance or new paradigm, this astonishing enthusiasm for equities is likely to outlast any crash (or buying opportunity, as it will be called). And, as we return to an older, pre-war pattern of widespread share ownership, it will change this nation. Financially, it will help solve the traditional British problem that risky new enterprises can't raise cheap capital. Politically, it may make people more willing to take additional responsibility for funding themselves in old age and infirmity, helping future governments wean people off the welfare state. And socially, we may be a little less reticent about discussing money and a little more comfortable with the entrepreneurial rich. We're all Sids now.