Government warned on skills crisis

Updated: 

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The Government has been pressed to help manufacturing firms tackle soaring energy costs and a looming skills crisis, as well as being pressed to appoint a minister for the sector.

A report for Tata Steel highlighted the impact of energy bills on so-called foundation industries such as chemicals, and metal and wood products, and warned of "significant" workforce shortages from 2020.

Karl Koehler, chief executive of Tata Steel's European operations, called for urgent action, with the appointment of a single minister to champion the sector in government and action on energy policy.

The report, by PricewaterhouseCoopers (PwC), stressed the contribution the sector makes to the UK and the "damaging" effect of the financial crisis.

Urgent action is needed to support recovery and help foundation industries capitalise on the economy's return to growth, said Mr Koehler.

But Business Secretary Vince Cable rejected the call for a specific minister for the sector, saying it would be "tokenism".

He acknowledged during the report's launch at London's Shard building, that energy costs were a problem for industry.

"We have to address the problem. This industry wants substance and engagement, and they have got it.
There is a difference between tokenism and real engagement."

Mr Koehler urged the Government to back foundation industries to help rebalance the economy towards industry and regions outside London and the South East.

"If the Government is serious about rebalancing the economy and creating sustainable jobs in the regions, it must recognise the importance of the UK's foundation industries," he said.

Mr Cable said: "The Government's industrial strategy is giving business the confidence to invest - delivering skilled jobs, driving growth and building a stronger economy."

Terry Scuoler, chief executive of EEF, the manufacturers' organisation, said: "I hope ministers will give careful consideration to this report because manufacturing and the wider economy is in many respects reliant on our foundation industries.

"If, as a result of high energy costs or other burdens, they become uncompetitive we will see more of them disappear from the UK as emerging economies thrive. It is not realistic to think we can exist without these industries which would be a disaster for the UK. Government must act to support this vital part of our infrastructure."

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