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I am delighted to speak briefly in this debate on a topic that is so important to our country and economy. I welcome the industrial strategy, which highlights the fact that the Government appreciate the need to be an engine for change. That is more important now than ever before, with Brexit, the technological revolution and the changing nature of the labour market.
The industrial strategy sets out five foundations of economic policy, but perhaps the most important foundation is people. People are the backbone of the economy and business, and the inventors and engineers of technology. We need a flexible workforce in today’s economy and tomorrow’s, so we need to ensure that the labour market has the correct skills to be flexible and progress our economy.
Currently, though, we have a skills gap, as Members in all parts of the House have recognised. I am passionate about tackling the skills gap in Wiltshire and the UK, having called it “the ticking time bomb” previously in this place. In fact, research from the Open University has found that the skills shortage means that there is a cost to UK business of more than £2 billion a year in higher salaries, recruitment costs and temporary staffing. The skills gap is particularly stark in the STEM and engineering sector. According to EngineeringUK, about 1.3 million workers are required each year to replace the ageing workforce and those leaving the sector. That is particularly pertinent in Wiltshire, which is a hub of engineering, design and technology. Every year I hold my own festival of engineering. Last year more than 3,000 students attended, and I hope to do it again this year in the Year of Engineering.
I welcome the investment of an additional £406 million in maths, digital and technical education, which will help to address the shortages in the STEM sector, but I believe that T-levels will prove the key to tackling the skills gap. The UK currently ranks 16th out of 20 OECD countries for the proportion of people with technical qualifications across STEM areas, whereas T-levels will provide a qualification that is academically regarded as well as being backed by industry. It will be relevant, applicable, and without stigma. For too long, the technical pathway has been littered with confusion and with various different routes.
I also welcome the ability for us to foster a flexible workforce through the creation of a national retraining scheme by the end of the Parliament, including a £64 million investment in digital and construction retraining. In essence, the beneficiaries of all this will be people. It will help to create highly skilled and better-paid jobs for the next generation, improving living standards across the country.
A core mission of the industrial strategy is to tackle our productivity lag. That is a real problem, and the industrial strategy provides us with real solutions. It is a huge opportunity. The national productivity investment fund will provide an additional £31 billion of investment over six years, which will enable us to seize this opportunity rather than talking down our country and our economy, as Opposition Members have done today.
This is a long-term strategy. It is not a theory but an action plan, involving more than £460 billion of projects currently sitting in the infrastructure and construction pipeline. Most importantly, it will tackle the skills gap and the productivity lag that for too long have impeded our economic growth.