We’ve heard it all before about reindustrialising Britain – Kevin Parkin
The Prime Minister in waiting says he wants to reindustrialise Britain. Andy Burnham has vowed to "support every region to set clear and credible industrial ambitions" and "safeguard sovereign manufacturing” in critical sectors. As a seasoned South Yorkshire industrialist who started his career in the dark days of the 70s and has spent decades turning around and growing manufacturing businesses, I have heard it all before.
Successive governments have talked about supporting industry but have done little to give us any confidence. Instead, they have focused on the service sector and the City at the expense of everything outside London.
I remember the last Labour government lining up a loan to Sheffield Forgemasters to build a major new forging press. They timed the announcement just before the 2010 election. The region's business community got behind it. Then the coalition came to power and cancelled it.
Then Prime Minister David Cameron and Chancellor George Osborne talked about rebalancing the UK economy away from London and the South East and came up with the Northern Powerhouse. Then came Brexit and Boris Johnson's talk of levelling up. Now Burnham is promising a Number 10 in the North – what he calls "the nerve centre of a rewired Britain" – albeit across the Pennines in Manchester.
In theory, this is a good thing. Spreading finances and decision-making across the regions would help. But not if devolution simply leads to an increase in bureaucracy and form-filling. Many companies have already stopped applying for training grants because they do not have the management time to complete the forms. Industry is facing many challenges. We need to get the work ethic into young people in schools and teach them how to get a job to support themselves and their families. The number of NEETS – young people not in education, employment or training – is catastrophic for the future of the UK.
For generations, large manufacturers such as British Steel trained apprentices and created a deep pool of talent that smaller companies could recruit from. Many SMEs could not afford to do this themselves. But the declining number of plcs in Yorkshire has drained that pool.
Universities need to work more closely with industry to help fill the gap. Thirty years ago in Sheffield, academics and directors would meet regularly to discuss syllabuses and the needs of industry. We need to get back to that. We should also be incentivising courses relevant to manufacturing and reducing fees for students who choose them. A history of art degree may be good for museum studies, but it will not rebuild British industry.
Energy costs are prohibitively expensive. If we are serious about reindustrialising Britain, this has to be addressed. We cannot expect manufacturers to invest and compete internationally when costs are so uncompetitive.
We need to upgrade the electricity network so that power can move efficiently around the country, accelerate progress on nuclear power and offer businesses and households a fair return for generating solar energy. Most industrialists have serious concerns about the policies pursued by the Energy Secretary, Ed Miliband, who is being talked about as the next Chancellor. I believe the public would accept pushing back net zero deadlines by two decades. We also need to address the supply of raw materials. Even steel that is not produced in the UK is incurring tariffs. Britain has lost the ability to produce high-specification steel and is importing from China, where it is often produced without environmental controls.
Britain needs to get a grip on major capital projects. Countries like France and Germany are able to deliver major infrastructure in a quarter of the time at half the cost. We need to increase the involvement of the private sector and learn from those approaches.
Despite these challenges, South Yorkshire is showing what is possible. The region has been designated a national hub for high-grade defence materials and components, backed by a £50m growth deal. Sheffield Forgemasters, now owned by the Ministry of Defence, is the beneficiary of a £1.3bn recapitalisation programme. And Castings Technology, the company I chair, is investing £17m in one of the world's largest titanium castings foundries, here in Sheffield.
There are also innovative approaches to tackling the NEET problem. Richard Caborn, the former sports minister, is helping to develop a skate park and education facility on a former industrial site in Attercliffe to give young people a positive outlet and a pathway back into employment.
Reindustrialising Britain requires long-term structural change. It will take longer than the rest of this parliament and probably the next one too. But the vision is right. At the very least it looks like we will have a Prime Minister who recognises there is life north of Watford.
Kevin Parkin is a leading South Yorkshire industrialist.