Industrial Strategy

Lord Mair Excerpts

Thursday 1st February 2024 Lords Chamber

[Lord Mair (CB)]

My Lords, I thank the noble Lord, Lord Watson, for securing this debate, and I congratulate the noble Lord, Lord Rosenfield on his excellent maiden speech. I will make two points: the first on the timescale and continuity of government funding for any sort of industrial strategy or growth plan, and the second on the acute national shortage of engineering skills, limiting the success of such plans.

First, in November the Government announced £4.5 billion of funding for the manufacturing sector. Eight key sectors have been identified: automotive, aerospace, and life sciences, and five sectors in the all-important clean energy industry—carbon capture, utilisation and storage; electricity networks; hydrogen; nuclear and offshore wind. These are undoubtedly all key sectors for our economy, and such funding is of course very welcome. To harness the all-important underpinning science and technology most effectively, the UK requires a robust and consistent strategy for industry.

However, at the same time it was also announced that this funding for manufacturing would be available from 2025 for only five years. Without a commitment to a longer pipeline of funding, this does not constitute an industrial strategy; it is surely no more than a temporary fix. As has been pointed out in this debate, Make UK, a body representing the manufacturing industries, has emphasised that

“Every other major economy, from Germany, to China, to the US, has a long-term national manufacturing plan”.


“Long-term” in this context means beyond five-year political cycles; it means longer-term budgets and durable institutions. It means a stable pipeline to enable the UK’s world-renowned research and innovation system to deliver and provide confidence for businesses to thrive.

Secondly, there is a huge importance of the need for engineering skills. Here I declare an interest as an engineer, both in practice and in academia, over the past 50 years. In its recent report, Engineering Economy and Place, the Royal Academy of Engineering finds that the total engineering economy contributes up to an estimated £646 billion of direct GVA annually to the UK economy—over 30% of total economic output.

Of the eight million people working in the engineering economy, 70% are engineers, yet there remains an acute shortage of engineering skills, which must be addressed. A recent report led by the Institution of Engineering and Technology

“estimated there is a shortfall of over 173,000 workers in the STEM sector”.

It called on the Government to help to tackle the UK’s engineering skills shortage by embedding engineering into the current school curriculum. As mentioned by my noble friend Lord Aberdare, this is consistent with the findings of the recent inquiry of this House’s Committee on Education for 11 to 16 year-olds. There is a substantial untapped resource of future engineers and engineering apprentices in our schools. We need to address this urgently and plug the skills gap.

In summary, any strategic support of manufacturing must resist any quick-fix approach and instead focus on a long-term pipeline. We need a planned industrial strategy and, to be effective, it must address the acute shortage of engineering skills.