Letter: R&D starved

Sir: John Battle, the minister for energy and industry, wants to know why a significant proportion of UK companies appear to place less emphasis on R&D than their international competitors ("UK companies lag behind in R&D spending", 25 June).

The answer is simple. UK shareholders insist on a high return on their investments and therefore money which should be going on R&D has to be used to "satisfy shareholder expectations".

Just who are these shareholders and why are they so short-sighted? Forget the cartoon figure of the bloated plutocrat complete with enormous cigar - the shareholders in question are you and me, through our pension funds, PEPs, Tessas, ISAs, and other savings accounts.

Fund managers have a duty to obtain the best return on their investments in order that our pensions can be paid in full and our savings can grow. The real question is: why do the fund managers fail to see that more investment in R&D might mean a little less dividend now but ensure a better future for UK technology and industry?

ROBERTA NICHOLS

Abingdon, Oxfordshire