If the UK is to remain a major independent economic and political power in
the new century, and if living standards are to be enhanced, it is crucial
Britain develops and maintains a highly skilled workforce.
Deficiencies in skills and training have been a source of weakness for the
British economy throughout the 20th century. In a survey conducted by NOP for
the Institute of Directors last year, 65 per cent of respondents stated that
while recruiting over the past 12 months their company had experienced a
shortage in the availability of skilled people. Many employers feel employees
have lower skill levels than are necessary to meet their business objectives.
Almost half of the participants in our survey considered they faced this
Addressing skill shortages, skill gaps and other recruitment difficulties is
ultimately the employer’s responsibility. British employers invest over £10bn a
year on training, and our survey showed 97 per cent of respondents provide it
in some form. However, the Government must ensure school-leavers have a basic
mastery of the 3Rs and the generic skills needed in the workplace. We welcome
David Blunkett’s emphasis on the need to improve literacy and numeracy
standards. However, the Government also needs to improve basic educational
standards among adults. Moreover, it needs to reconsider its approach to
post-16 and higher education. While the UK has the highest proportion of
graduates in the European Union, we have a relatively low proportion of
employees with intermediate level vocational qualifications. There should be no
further publicly funded expansion of higher education. The Government should
concentrate its resources on expanding the number of individuals with
intermediate level qualifications.
The Government can help British business secure skilled personnel through an
appropriate immigration policy. Additionally, it should keep the tax and
regulatory burden low so firms will have more resources for investment in
general, and training in particular.
Finally, the Government must maintain a stable macro-economic framework. The
boom and bust cycle engenders acute skill shortages and bottlenecks and
jeopardises investment in training. It is partly for this reason the IoD
supports the Government’s decision to grant operational independence for the
Bank of England and opposes premature entry into the euro. Britain’s new
monetary system shows every sign of delivering the macro-economic stability the
business community has been craving and should not be jettisoned.
If the Government can deliver these five policies, British business can meet
the skills challenges that lie ahead. Over to you, Mr Blair.