Chi welcomed everyone to the meeting and laid out the four tests Labour has set for its Industrial Strategy (IS):
1) Labour’s IS will include the whole country.
2) It will include different sectors.
3) It will be people centred, focusing on good jobs and good working conditions.
4) It will create a healthy business culture.
The following represents the opinions voiced by the small and medium enterprises (SMEs) included in the Round Table and do not necessarily represent Chi’s positions or those of the Labour Party. Points made included the following:
The UK needs to change its core focus away from UK Plc but rather to a UK Community Interest Company (CIC). The IS should focus on what business can achieve for community, and on sharing economy and young people. It is important to look at business holistically rather than just focusing on money. People matter, including family and fun places. It is important to have an IS that addresses the diversity of people in the workforce. By focusing on people, the IS can facilitate adaptation at all levels to enable and support changing work methods and organisations as well as a changing economy.
Trust issues exist. Large corporations have been demonised and all business has been tarred with the same brush; but ‘Fat Cat pay’ is relevant in only a very small percent of businesses.
It is important for the IS to simplify the relationships between Government and business. Businesses need certainty, stability and a sustainable environment. Without this, businesses are not incentivised to take positive actions that the Government wants to encourage. For example, NECC had been installing solar panels but work stopped when solar policy changed midway through the program. Businesses also need more clarity on taxes which are overly complex and focus more on punishments than rewards. Taxes need to be simpler and easier to collect, which can be achieved through Digital reform.
Education and skills were thought to be key factors in a successful IS, but achievement in education is worse in the North. Therefore, effort and emphasis should be on education and aspiration including basic transferable skills, creativity, and getting young people to talk about enterprise.
Issues to be addressed include: the existence of silos in university and other organisations; the challenge of stimulating young people to think differently, develop curiosity and have open mind sets given such silos; the lack of careers among young people; and the lack of understanding of the need for STEM among young people. Once people are in the education system, it is also crucial to get them into the workforce. Universities and local businesses should be seen as a supply chain and relationships between employers and universities should be incentivised.
The way teaching and curriculum is measured needs to be rethought. At present, there is an overemphasis on outcomes and not output, quantitative and not qualitative results. Intangible, but desirable factors must be focused on in addition to physical matters currently being measured. Education needs to provide people with skills, teaching them ‘how to learn’ and giving them a wider knowledge of a subject rather than being purely exam orientated. In order to achieve this, children need to be provided with the proper resources, such as computers in Nursery and Primary Schools. BEIS must work effectively with the Department of Education, the Department for Communities and Local Government, the Department for Transport, and more.
Skills shortages can’t be fixed by overnight factors. Early motivation at ages eleven and twelve is needed. Inspirational people need to tell young people of the rewards and opportunities of careers for life. It is important not to ask thirteen and fourteen year olds make life career choices, ones that are often away from STEM. Parents need to know where jobs are so that they can be empowered to push their children in the right direction. Therefore, the location, opportunities, potential and salaries of available jobs all need to be made more visible.
Education needs to provide more engineers. 450,000 are needed by 2025. Businesses need engineers and an education system that produces them. Basic STEM skills should have been acquired by most when leaving school.
Apprenticeships are a key need, but there are difficulties in negotiating how the appropriate number and quality can be achieved. Apprenticeships are a significant cost for SMEs, perhaps assistance is needed via supply changes. Procurement requires corporate social responsibility (CSR) assessment but it fails to check the number of apprenticeships provided. Better reporting and checking is needed.
Access to continuing education is also required. Successful SMEs are often started by experienced middle aged people, but enterprise funding is largely only available to young people. To this end, it is necessary to change the culture of always seeking young people rather than old people for employment. For this to be achieved, older people need to be able to access higher education, further education, and student funding to allow them to re-skill and have more than one career in a lifetime.
North East Issues
The North East as a region has specific needs that should be addressed in the IS.
Issues specific to the North East include: the disruption of manufacturing and export in the Region which Brexit will cause; the lack of critical mass of sizeable corporations and companies in the Region; the dearth of project management skills in the Region; the need to retain skilled people and prevent them from moving out of the Region to work for large corporations not present in the North East; and the limited Digital coverage and transportation in the Region.
These issues can all be addressed in an IS that uses place based thinking to account for the variation among the needs of the different Regions. To this end, Regional Development Agencies should be reinstated as NE Local Enterprise Partnership has not filled the space.