DG Nicholas is correct about the demise of British turbine-generator capability.

But it happened also to manufacturers of machine tools, aircraft, cars, motor cycles and more. It is too easy to blame it on poor management - there was a wider underlying reason.

Until the First World War, large companies grew supported by long term credit arrangements, initially by funding by the large estates in Victorian times, and later from finance sources. Sir Alfred Herbert built his company with large cash reserves to carry it through recessions. When Westinghouse (US) built the Trafford Park Plant in 1900, it is reputed that they did not take any money back to USA until 1910. Between the wars HG Nelson built English Electric; later Weinstock merged EEC & BTH into GEC, and built a huge cash mountain subsequently dissipated by his successors. All these and the car companies (saved only by Japanese and Indian investment) failed because they could not raise the cash to fund the long term R & D, to develop and finance new products. Why?

In the last half of the last century, all these firms were publicly owned stockholding companies, where the guiding influences on company chairmen were the share price and the dividend. Pressure by shareholders and pension fund managers demanded emphasis on the bottom line and immediate profits. By contrast, as I learned from the UK managing director of one of the Japanese machine tool companies which set up here, they were able to borrow long term funds from their own “family” bank, and were not asked to repay the loan, but regard the continuing interest charges as a running cost. Meanwhile, German and French companies obtained, by government loans or subsidies, the strength to develop new technologies and eventually to buy up British companies, while strongly resisting takeovers of their own industries.

Your correspondent is correct in that the future for the UK must lie in advanced technology industries, but they must have access to long term finance at acceptable rates.

Donald Rushton, Stratford upon Avon