Skills and automation dominate industry talk at party conferences

Industrial strategy, a dodo of public policy at the end of the 20th Century, is back very firmly in the political dictionary but do we really know what it means?

I went to the two big party conferences to search for the substance behind the rhetoric when Labour gathered in Brighton and the Conservatives hit Manchester, trawling the fringe meetings for substance from the elected politicians and to get a sense of how much the delegates were in tune with their politicians.

What I found at the two conferences was a good will to manufacturing and language that we would recognise on skills, local investment and infrastructure. But, there was plenty of room for confusion.

We do have two documents to guide us in our search. The Government’s Green paper, Building our Industrial Strategy, had the 10 Pillars of Industrial Strategy when published back in January, before the interruption of the general election, and is still in post-consultation analysis. Then there’s Labour’s rival document, Richer Britain, Richer Lives, with two missions, broadly splitting into a green agenda and innovation.

The younger audience at the Labour conference were looking more to the opportunities and challenges of automation, worrying about the threat whilst excited by the opportunity

The impression from sampling a dozen fringe meetings is rather different and the pillars, based on this look, might need a bit of support. In Manchester, there was a wide acceptance that skills would be the dominant issue, a real shift from the devolution prominence of last year’s Tory Conference in Birmingham. In the sea air of Brighton, the younger audience at the Labour conference were looking more to the opportunities and challenges of automation, worrying about the threat whilst excited by the opportunity.

These are not incompatible priorities, which is good news for political consensus and particularly for engineering, but priorities will matter in times of tight public spending and global change.

The need to improve productivity is a recurrent theme. Great Yarmouth MP Brandon Lewis, former Housing Minister and now Minister of State for Immigration, told an LSE-organised meeting that practices needed to change, particularly in construction, as well as promising that changes to immigration controls would be “in the context of industrial strategy”.

“We still build houses in the way we did 50 or 60 years ago,” said Lewis, explaining that upskilling in the UK was essential and that would take time. When I asked him whether a shift to prefabricated units for housing would lead to more imports from countries which already use this approach, Lewis thought that there would be enough time for local production to be established. “We’re not going to shift from where we are now to modern method overnight,” he said.

It was Frances O’Grady, TUC general secretary who really emphasised the scale of change coming at an event organised by Bright Blue, a relatively recent think tank. “The digital economy is going to transform millions of jobs,” said O’Grady, “We have to start in a place where we’re honest about the problems we face.”

That message about the scale of change was less obvious in Manchester than it had been in Brighton the week before when it was standing-room-only for any events mentioning artificial intelligence or the next industrial revolution at fringe meetings during the Labour Party Conference.

Monday was the day for business at Labour and the Shadow Chancellor John McDonnell's speech on the economy. Reports of that speech were dominated by commitments to nationalisation, which could have a significant impact on the engineering sector because the targets include rail, energy, water and the Royal Mail.

Reassuringly, McDonnell also highlighted the changing pattern of work, the need for investment in science and technology and just how much the jobs of the future will be different. There are specific commitments in Labour’s Industrial Strategy paper that include £% of GDP invested into research and development, and a national education service for lifelong learning. That education commitment includes an ambition to double level three learners rather than including bold targets for the higher level skills that will be needed in the future as automation changes work dramatically.

At the CBI-sponsored fringe McDonnell was challenged for understating the scale of change, of being too “conservative”, in the changing pattern of work by finance champion Tim Hames, Director General of BVCA, the British Private Equity and Venture Capital Association. Hames predicted that half of all current jobs would disappear to automation by 2033.

The implication for skills was recognised by shadow skills minister Gordon Marsden when he told a devolution and industrial strategy fringe that the silos of education and training needed to go. “We are in a world where FE (further education), HE (higher education) and online learning are merging much faster than most policy makers understand,” said Marsden, calling for an approach to developing the workforce for higher productivity occupations and abandoning the approach of “Any Job will do” which he attributed to the Department of Work and Pensions.

There were warm words about science research and innovation but little discussion at the conferences

How does this all stack up against the ten pillars: science, research and innovation; skills; infrastructure; business growth and investment; procurement; trade and investment; affordable energy; sectoral policies; driving growth across the whole country; and creating the right institutions to bring together sectors and places.

There were warm words about science research and innovation but little discussion at the conferences. Trade and investment are stalled by Brexit. Energy policy has been more consumer focused with domestic price caps. And, there was real doubt about the commitment to devolution in Manchester. The Conservative leader of Portsmouth City Council, Cllr Donna James was really blunt on this one. “I think devolution is off the agenda,” she said, saying further that housing would be the priority for the Department of Communities and Local Government and that infrastructure in her area had been badly neglected.

The need for the right skills was certainly discussed. How does the scorecard look there? Just a few days after the conferences the Department for Education released the news of a dramatic, 61% drop in apprenticeship starts since the introduction of the levy and then announced delays to the introduction of T-Levels, proposed as the saviour for vocational qualifications, suggesting that even in the priority areas the industrial strategy has a long way to go. As Neil Carberry, skills head at the CBI put it in his told-you-so tweet in response to the terrible drop: “No argument now that policy doesn't need redesign to work, as @CBItweets has said”.

With the former skills minister now chairing the Education Select Committee, the scrutiny of that redesign work is looking like a self-marked homework assignment. That must be a massive concern for business and particularly a high-skills, high productivity sector like engineering. The sector has a lot of influencing to do.