To be honest, there aren't that many jobs to fill and there wouldn't be much point in having more graduates.
Also, UK universities are expensive and not particularly good. UK Graduates have to compete against the cream of the crop of European graduates who had free education and are desperate to flee their country.
I don't understand your point. The UK contains the largest proportion of STEM workers in Europe, equalled only by Germany, and the UK contains some of the best unis in the world.
The first point is self explanatory. There is no shortage of STEM graduates and a limited amount of jobs. Why would would you want to train many more?
Every big developed country has some of the best universities in the world. The UK is not any better than what can be found in Germany, France, Switzerland, Poland or Romania.
I guess what I am trying to get at is that there is no struggling as you said. It's the opposite in fact, there are way too many engineers/scientists trained across Europe. They can't find jobs where they come from and they are forced to move to London or Germany.
Also, UK universities are expensive and not particularly good. UK Graduates have to compete against the cream of the crop of European graduates who had free education and are desperate to flee their country.