Stability, skills, sustainability: Engineering experts react to Labour victory
Author : Sophia Bell, Group Editor
05 July 2024
The recent decisive victory of Sir Keir Starmer and the Labour Party in the UK General Election has the potential to have far-reaching implications for the manufacturing industry, as well as the country as a whole. Here’s what industry leaders have to say…
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Political and economic stability
On the whole, industry leaders have welcomed the election results, with many optimistic that the new Labour Government will bring much-needed political and economic stability.
The manufacturing sector is now calling for renewed investment to stimulate economic growth. “Looking ahead, the new Government has a lot in its in-tray to address,” emphasised Stephen Phipson, Chief Executive of Make UK.
“First and foremost is the urgent need to kick start the UK’s anaemic growth levels of recent years and, boost investment in our infrastructure, without which we cannot address the many urgent priorities the country faces at national and regional level.
Tony Hague of PP Control & Automation outlined some suggestions for how the Labour Government can boost economic growth. He suggested that adopting fairly simple strategies such as “a revised R&D policy, a review on Corporation Tax and more sustained support for SMEs” could go a long way in addressing manufacturers’ concerns.
"Now the election is over, we must see positive and bold action from the Bank of England, and this should start with interest rate cuts to stimulate the economy, and reduce the cost of borrowing," Hague added.
Sustained industrial strategy
The need for a robust, long-term industrial strategy is a key concern for manufacturers. Such a strategy is deemed essential for addressing the skills crisis and ensuring sustained growth for the sector.
"Manufacturers stand ready to work with the new Government and all stakeholders as a matter of urgency to help deliver this," said Make UK.
As part of this strategy, many in the industry reiterated the need for a dedicated Minister for Manufacturing to ensure that the industry’s voice is heard. According to Stephen Morley, President of the Confederation of British Metalforming, adopting this approach could prove to be “an early win” for Labour, as it would “show a willingness to place new importance on a sector that drives innovation, supports GDP and creates high-skilled jobs”.
A strong industrial strategy would also help to encourage more into the sector, creating more jobs. Such a strategy should not be limited to the Labour Government, but should be cross-party to ensure its longevity, said Morley. “Industry requires a long-term strategy to build trust and give companies confidence to invest,” he stressed.
“To have a strong economy we must be making product, yet many companies are dying with their owners choosing to retire rather than succession planning. We want a strong industrial sector with pathways to jobs for all.”
Net zero
The green transition and sustainability remain at the top of the agenda for manufacturers. Labour’s approach so far has been a mixed bag. In the lead-up to the election, the party made several green pledges in its manifesto, including allocating £6.6 billion to making five million homes more energy efficient, as well as offering grants and low-interest loans to support the adoption of insulation, solar panels, batteries, and low-carbon heating systems.
Other key pledges include establishing a clean power system by 2030, setting up Great British Energy and a National Wealth Fund to help decarbonise industry, and forming a global Clean Power Alliance.
However, in February, Labour took a U-turn in its net zero policy, slashing its previous green investment pledge from £28 million to under £15bn – only a third of which would be new money.
Now, industry is urging Labour not only to deliver on its promises, but to make them more ambitious. “Establishing greater momentum on a successful green transition will be central to the agenda of this next government,” commented Caspar Herzberg, CEO of AVEVA.
The UK software company also pointed out that greater sustainability necessitates greater digitalisation. “With Labour anticipating a rapid ramp-up of renewables, digital systems will be essential to underpin information sharing and aggregate insights at scale,” Herzberg continued.
“This, in turn, will be vital to providing the systemic innovation and agility required to drive resilience, efficiency and profitability in the net zero transition."
Education and training reforms
Enhancing career advice and training, addressing STEM teacher shortages, and adapting the Apprenticeship Levy are all initiatives deemed crucial for developing the skills needed in the engineering sector.
With engineering and technology expected to grow faster than any other sector between now and 2030, industry players have highlighted the importance for the new Government to collaborate with the industry to overcome the barriers currently preventing young people from entering the workforce. A strategic approach to skills development will support large-scale projects such as Great British Energy.
Organisations are advocating for a comprehensive workforce strategy to address the skills shortage. Hilary Leevers, Chief Executive of EngineeringUK, highlighted the need for a coordinated approach: "We have been asking for a national engineering and technology workforce strategy for some time to streamline coherent action and replace the current approach of different areas developing their own solutions in isolation," she said.
As part of Labour’s manifesto, the party has committed to a devolution strategy which will see skills investment decisions, which are currently being made centrally by Westminster, reallocated to local communities. The aim is for these communities to make informed decisions based on their own particular needs.
This approach has been praised by some in industry, with Gareth Jones, Managing Director of In-Comm Training, saying, "We would welcome this, as long as the funding is open to the best providers and organisations and not ringfenced for the few."
EngineeringUK further emphasised that, in order to be successful in tackling the sector's skills gap problem, the Government’s industrial strategy cannot just be implemented by manufacturing employers in the workplace; it must start in education, with teachers. STEM teacher shortages are only increasing; there are currently just over 1,600 vacancies, compared with 1,300 a year ago.
As a result, Leevers said, Labour needs to invest in STEM teacher recruitment and retainment, as well as enhance career advice for schoolchildren.
This sentiment has been echoed by Jones, who pointed out the need for further funding to schools, in order to address the gaps that leave young people unprepared for vocational education. "Channelling further funding to schools to boost English and Maths standards is the right thing to do,” Jones said.
“Too often, young people leave without achieving these GCSEs and we have to step in to deliver the functional skills they require to start a pathway into vocational learning."
Apprenticeships, too, will play a key role in encouraging young people to pursue careers in STEM. Jones underscored the necessity of maintaining strategic funding for skills provision and expanding the current Apprenticeship Levy.
“To be fair to the Conservatives, they did put apprenticeships back on the map and reignite its credibility among learners, parents and employers.”
However, he stressed, more needs to be done by the new government to build on this success and ensure they deliver on the promises outlined in Labour’s manifesto. “Now the baton has been passed to Labour to build on this evolution and there have already been some big promises leading up to this election – widening the scope of the Apprenticeship Levy would be a very welcome move, for example.”
This has similarly been endorsed by Steven Morley: “We urgently need a review of the Apprenticeship Levy and how funding in this pot can be spent. “
Morley stated that “more creativity” and empowering manufacturers to apply the funds to technical courses catered specifically to their needs will be key to the development of a greater number of apprenticeships.
“There is also an argument that the current funding structure doesn’t encourage training providers to support Level 2 apprentices, which traditionally is what we call foundation Level,” Morley added.
“We’re all for upskilling, but we’re missing an important rung of the engineering ladder.”
EngineeringUK summed up the feeling of industry: "As the new Government has rightly recognised, we need to nurture a greater pool of talent in engineering and technology, including more apprenticeship opportunities for young people, to meet current demand and help our economy thrive and achieve our net zero goal."
In summary
With calls for a national workforce strategy, enhanced skills training and strategic investment, industry leaders are tentatively optimistic about the future under a Labour Government. The Prime Minister and his cabinet must now take action to address the critical issues of STEM education, ensure a considered approach to the green transition, and invest in crucial infrastructure, in order to unleash the full potential of UK engineering.