The UK’s rising energy costs and skilled labour shortages are holding businesses in Coventry and Warwickshire back, experts have said – with fears the country could be left behind unless it is addressed.
Key industry figures from across the manufacturing, automotive, construction and engineering (MACE) sectors discussed the hurdles that are stunting economic growth at a roundtable event hosted by the Coventry and Warwickshire Chamber of Commerce.
The event was chaired by Coventry and Warwickshire Chamber of Commerce Chief Executive Corin Crane and Chair of WMG Margot James at WMG’s Prof. Lord Bhattacharyya building based at the University of Warwick.
Inflationary pressures, the level of business rates, and delays in the planning system were among some of the issues highlighted, but energy prices and labour shortages came on top of the biggest problems facing the region’s MACE sector right now.
Corin Crane said: “There are some really tough times coming up. Energy is a big deal, access to a skilled and enthusiastic workforce is a big deal.
“Almost every single business we have spoken to – apart from energy costs – has said skills is the biggest challenge they are facing.
“They say we have got the business, got the opportunity, but have not got the workforce.
“This is not just manufacturing, but the public and private sector. These are things which are genuinely holding our businesses back.”
And some feared it could drive industry overseas unless tackled.
Tim Squires, of Squires Gear and Engineering, added: “Material is cheaper abroad. Labour is a fraction of what we have to pay. You then add on the insane energy costs we are facing.
“It needs to change soon or we will have no manufacturers left in the UK.”
Discussing labour problems, Gareth Jones, Managing Director of In-Comm Training West Midlands, believed industry needs to “take onus on their own skill shortages”, whilst President of Coventry and Warwickshire Chamber of Commerce Tom Mongan believed cost-of-living pressures could force the next generation out of apprenticeships unless financial support was provided.
Pro-growth campaign group Britain Remade said a long-term solution for energy costs was for the UK to mirror renewable energy work in Spain, with a greater push needed on building renewable energy sources such as onshore and offshore wind, solar, and nuclear power stations which will in turn help drive down costs.
WMG Exec Chair and former Government minister Margot James said: “One of the biggest problems is not that the companies do not want to commit to the UK, but the costs of energy in Spain are so much less.
“Energy costs here are more expensive than not just Spain, but many parts of Europe.
“If your cost of energy for production is so much cheaper elsewhere, it becomes a huge challenge to stay competitive"
Cabinet member for jobs and regeneration at Coventry City Council, Cllr Jim O’Boyle, added:
“The energy question is the single biggest issue.”
Referencing support needed for Coventry’s plans for a Gigafactory, he added: “If you do not build batteries in this country, manufacturers will not build the cars that need them here either. Instead, the automotive sector will go to Europe, America or the Far East where the battery manufacturing exists now and is growing. We are losing industry in manufacturing because there is no cohesive national industrial strategy.”