Manufacturing Skills

Ian Sollom Excerpts

Tuesday 20th October 2026 Westminster Hall

[Ian Sollom (St Neots and Mid Cambridgeshire) (LD)]

It is a pleasure to serve under your chairship, Sir Christopher. I congratulate the hon. Member for Isle of Wight West (Richard Quigley) on securing this important debate.

I start with some numbers we should celebrate: UK manufacturing produces output worth £220 billion and supports 2.6 million jobs, paying on average 8% more than the rest of the economy, and it accounts for 42% of our exports and almost half of all business research and development. It is a sector of skilled, well-paid careers that we are rightly proud of, but it is also a sector that could do more if it had more of the skilled people it needs.

Skills England identifies advanced manufacturing as having the third highest proportion of skills shortage vacancies of any sector, and projects that 84% of the additional jobs in its priority occupations to 2035 will need qualifications at level 4 or above. The businesses in Cambridgeshire that kindly shared their insights with me in advance of this debate described problems that I suspect Members from every part of the country will recognise. One electronics firm, Cap Air, told me that although electronics is the largest manufacturing sub-sector in our region, the county is a dead spot for the sort of technical education it needs, with training necessitating travel outside the county. There is no occupational standard for much of the work the company does. As Cap Air put it,

“You cannot fund a course for a job the system does not recognise.”

That is a national problem for Skills England, but lack of local provision is something places could fix for themselves. I hope the Prime Minister’s well-known enthusiasm for devolution extends to giving areas like ours the skills, powers and capital funding to do it.

Another manufacturer in my constituency, ZEISS, which makes electron microscopes, makes a related point about the future. Advanced manufacturing now combines traditional mechanical and electrical engineering with automation, software, data and AI, and we need to build those capabilities now before they become critical shortages, not just fill today’s vacancies. In 2024-25, there were over 46,000 starts in engineering and manufacturing in England, but level 2 manufacturing starts fell by 80% in the five years to 2023-24. That is a significant problem in Cambridgeshire and Peterborough.

The Liberal Democrats have long called for the apprenticeship levy to be replaced, so we welcome the Government’s move to a more flexible growth and skills levy, but we recognise that progress has been slow. Apprenticeship units have been available since April, yet the skills charity Enginuity found that a fifth of manufacturing SMEs have never heard of them, and only one in 10 think that they will fill their skills gaps. On the Department’s own forecasts, apprenticeship spending is due to fall after this year, even as levy receipts rise.

Employers tell me that the system needs to be straightforward for employers to use, responsive to changing industrial needs, and attractive to young people as a genuine alternative to university, but too often it is none of those things for smaller firms. The apprenticeship model may work for large employers, but a firm of 20 cannot easily release a young employee for two or sometimes three days a week to a college that might be miles away. It is also difficult for them to carry the paperwork that comes with. Another manufacturer in my constituency, Domino Printing Sciences, pointed out that employers pay into the levy but cannot use it to cover much of the real cost of employing and developing an apprentice, as the funding bands for many engineering apprenticeships simply do not cover the cost of delivery. As a result, we have employers with skills gaps, young people who need good routes into careers, and apprenticeship funding that is not fully used.

As hon. Members might expect me to say, there is a lot that the Government could take from Liberal Democrat policy. We would like to introduce skills tax credits with enhanced relief for priority sectors to reflect the fact that skills are an investment. We would also establish structures for skills co-operatives—I know the Prime Minister likes co-operatives—so that smaller firms can pool training resources and even rotate apprentices between them. We would also expand higher technical routes, such as higher national certificates, higher national diplomas, foundation degrees and higher apprenticeships, building on the investment already made in FE colleges and institutes of technology.

We would like Skills England to be a truly independent body with employers at its heart. Already in its short life, it has been moved from the Department for Education to the Department for Work and Pensions. It remains an Executive agency in that Department and is not the independent voice for skills that employers really need, so I urge the Government to look again at giving it genuine independence.

I have three questions for the Minister. First, levy receipts are forecast to be £4.5 billion this year, but after the devolved nations’ share and England’s £3.3 billion budget, about £700 million will not be returned to the skills system but will stay with the Treasury. On the Government’s own spending predictions, that will rise to about £1 billion next year. Will the Minister commit to ensuring that the money raised for skills is spent on skills and is not clawed back by the Treasury?

Secondly, will the review of funding bands address the shortfall of up to £8,000 per apprentice that employers face in engineering and manufacturing? Thirdly, will the Minister press Skills England to develop occupational standards for a wider variety of manufacturing roles, such as printed circuit board assembly, which the system currently cannot see? Nyobolt, a battery manufacturer in my constituency, put it well: the opportunity now is to make sure the skills pipeline develops at the same pace as the technology.

Skills, like manufacturing investment itself, require multi-year, long-horizon decisions. Industry needs a long-term, stable plan from the Government, and I hope the Minister will tell us that it is coming.