SOARING energy prices pose an “existential threat” to many businesses, the boss of the UK’s manufacturers’ organisation warned on a visit to Bournemouth.

Stephen Phipson, chair of Make UK, said the next prime minister should cap industrial energy prices to avoid more companies going to the wall.

He also praised Dorset as a “hub of innovation” which was well-placed to take advantage of opportunities in industry.

Mr Phipson was speaking at a business breakfast held on day one of Bournemouth Air Festival by BCP Council and Dorset Engineering and Manufacturing Cluster.

He said Make UK had been lobbying the government for an industrial energy price cap.

“We’ll see how much progress we make on that with the new administration next week,” he told the event.

“The government we have was saying last week that businesses can simply pass on these rises to their customers – and it doesn’t work like that. Many of us are on fixed-price contracts."

He told the Daily Echo: “It’s an existential threat to a lot of those businesses. What we need to see is urgent action on an energy price cap of some sort. We’ve got to do something now.

“It’s absolutely critical we get this right. We’re seeing our competitors being looked after by their governments in Germany, France and Spain."

Mr Phipson also spoke about the other challenges facing manufacturers, including a labour shortage and a drastic drop in the number of apprentice starts.

“We are in the top 10 global manufacturing countries,” he said.

“We did a survey about a year ago and there was still this view of a Dickensian and Victorian factory and that we’re probably number 100 in the world – and that’s a problem because we need to attract the right talent into the sector.”

He said manufacturing was worth around £200billion to the UK economy and employed 2.5m people, whose average salary was around 30 per cent more than the UK average.

But he said many people in the sector had left the workplace during the pandemic, while many of the 1.2m European Union citizens who had worked in the sector had returned to their own countries and not been replaced. 

Apprenticeship starts – which stood at 100,000 a year before the government introduced the apprenticeship levy – were down to 32,000 last year. Around 96,000 jobs in the sector had been vacant for at least six months.

But he said there were many opportunities for the sector, including digital technology and the drive towards net zero.

“Dorset, being a hub of innovation, being a hub of really established big names that have contributed really well to the country, is very well placed to take advantage of those positive trends going forward,” he added.

The event heard from BCP Council deputy leader Cllr Philip Broadhead that the sector employed 28,000 people in the council’s area and was worth £2billion to its economy.

“That’s more than many sectors but we frankly don’t talk about the sector enough,” he said.

“We really want our names and all that we’re doing here to be front and centre of the new government’s agenda as well.”

The event also heard from a team of RAF engineers who maintain Chinook helicopters, as well as the RNLI's director of engineering and supply, Jamie Chestnut; Amy Miles, manufacturing manager at Poole marine electronics firm Actisense; and James Robinson of PKF Francis Clark.