Manufacturing Skills
It is a pleasure to respond on behalf of His Majesty’s Opposition and to serve under your chairmanship, Sir Christopher. I thank the hon. Member for Isle of Wight West (Richard Quigley) for securing time in this House for this really important topic. I have heard a lot of very good speakers, and I agree with their sentiment. Although we may not always agree on every policy issue, I do agree that our best years are ahead of us. Before I was a Member of Parliament, I was a director of the local enterprise partnership in the west midlands. I remember my first ever meeting, in which I spoke to the chair of an FE college, who told me that the time between what his college could deliver and what businesses said that they wanted was about three years. That told me two things, as a small business owner: that the skills landscape is incredibly complex and difficult for businesses to navigate, and that demand plays a huge role. I will talk about demand in a bit. The UK’s manufacturing sector is hugely important, accounting for roughly 8.5% of total economic output across the country, and employing roughly 2.6 million people. I was delighted that the hon. Member for Stoke-on-Trent South (Dr Gardner) mentioned the Lunar Society, because I was a member of a modern-day Lunar Society—in fact, I helped to write its constitution. I was pleased that she put that on the record. I am the proud Member of Parliament for Meriden and Solihull East, a constituency in the heart of the west midlands. We are also a UK manufacturing powerhouse, because we are the home of Jaguar Land Rover. The west midlands remains the UK’s leading manufacturing region, and Jaguar Land Rover is right at the heart of that. The region contributes £10.4 billion and employs more than 200,000 people. The shadow Chancellor and I recently visited Rolls-Royce, which has a huge facility in the west midlands. I invite the Minister to visit it, because it does a huge amount of work. I know it is said that the UK does not manufacture anything anymore, but I reject that; I do not think it is true. I saw at first hand engines and control panels being built for some of our most important and sensitive projects, and met a number of apprentices, who showed how important apprenticeships are. I am proud that the previous Government over 14 years created more than 5.2 million apprenticeships. As shadow Minister of State for Education, I regularly hold meetings with businesses, further education colleges and others who are very concerned about skills shortages in the manufacturing sector. In July, I hosted a roundtable in Parliament with Enginuity,<strong> </strong>a charity focused on closing skills gaps in the UK’s engineering and <span id="310WH" class="column-number" data-column-number="310WH"></span>manufacturing sector. It was clear from the businesses we met that they expect the Government to do much more to help support manufacturing, and help engineering businesses to recruit the best talent. We spoke at length about some of the findings in Enginuity’s recent “Mind the Gap” report. Its research found that around half of surveyed SMEs reported skills-related issues in the past year, with 36% experiencing skills gaps and difficulty recruiting workers. It estimates that the failure to plug that gap in manufacturing skills costs the UK economy £5.2 billion annually. That is clearly an important area that needs to be fixed, we must all agree. I would like to know about the Minister’s relationship with the DFE and how she works to ensure that the advanced manufacturing workforce is skilled, not just at NEET-level but throughout careers and lifelong learning. I am confident about the future of the UK’s manufacturing sector. It is a growing industry that will offer varied and exciting jobs for the future, but there are significant challenges coming manufacturers’ way as a result of Government policy, which we already see. Yesterday, the Prime Minister wrote in <em>The Times </em>about the prospect of Britain facing “economic catastrophe and moral failure” because a generation of young workers has been written off to a life on benefits. I agree, because youth unemployment is now 16.4%. When the Conservatives left office, it was 14.2%, so there has been a significant increase. There are currently one million 16 to 24-year-olds not in education, employment or training. I welcome the Government’s focus on reducing that number, because we will support them in the right policies; unfortunately, however, it is the view of His Majesty’s Opposition that the Government’s approach to tackling that grave injustice is entirely wrong. I have talked about demand in this sector. The drastic shortage of jobs in sectors such as manufacturing is a result of the Government’s policy platform. I did not once hear Labour Members talk about the impact of national insurance, tax and the reduction in the national insurance threshold, or that the cost of employing an apprentice has gone up so much that is has become challenging for businesses to take them on. Where they are employed, the opportunity cost means that fewer apprentices are taken on, as a result of such policies. It is obvious to us that the Government’s tax policies are making it harder for young people to get into good jobs. That is not just the view of the Opposition. Huw Pill, chief economist at the Bank of England, agrees that higher national insurance contributions and the Government’s increase in the national living and minimum wage have priced out entry-level workers, many of them young people.