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Labour jettisons training levy plan

The Labour party has abandoned the last vestiges of attempting to make employers invest in training through a profits levy or compulsory funding of study schemes.

Its revamped training package, The Skills Revolution, unveiled yesterday is designed to woo employers and individuals with cash incentives and a cheap supply of high-quality training material.

Individuals will be given Pounds 150 Government cash to add to the first Pounds 25 they spend opening individual learning accounts - savings schemes for employees to pay for education and retraining.

Employers with fewer than 50 staff will be offered cash incentives to become Investors in People (IIP) - a Government scheme intended to encourage employers to invest in staff training. Firms will have to publish details of spending on training in annual accounts.

Each initiative is costed at Pounds 150 million for the first year. Labour is confident it can get the cash from cuts in training and enterprise council bureaucracy, a Pounds 150 million Euro-cash entitlement which the Government has failed to bid for and a balance from the windfall tax on public utilities.

The policy paper was published jointly by education spokesman David Blunkett and training spokesman Stephen Byers. The move was seen by many in the party as a signal of "agreement and unity" after a behind-the-scenes fight between the voluntarist and compulsory levy lobbies.

The first-year cash estimate of Pounds 300 million is exactly what Labour could have hoped to net had it gone all out for a return to the levy on employers.

A third key strand in the policy paper is support for the new University for Industry. Its first task will be to provide individuals and employers with advice and education packages for use in the home, library, college or work-place.

Between the policy lines, however, there is an enormous act of faith. Labour admits that for it to work, employers must be willing to release people within work time for education and retraining. They will also need to make some contribution to the individual learning accounts if employees are to "bank" enough to pay for courses.

The European cash would not be forthcoming unless employers, TECs or local authorities were willing to match funding. Also, all the funding is in arrears, which means there could be little retraining in the first year unless the Government were to put the cash up front or pay the interest on equivalent loans.

But Mr Blunkett insisted there would be enough in the pot in the first year to put the equivalent of a million people through college courses such as the 14-hour beginners information technology programme, two months basic training in communication and literacy skills or a diploma course in professional interior design.

"Our programme is based on real partnership between individuals, enterprise and Government. We recognise the important role of employers and Government in supporting employees to train. But we recognise that in a changing world individuals have a responsibility to develop their own skills too," he said.

But Labour has clearly laid itself open to the accusation of stealing others' clothes. A spokesman insisted that they would radically improve IIP by slashing red tape and offering incentives. Some 23 per cent of the work-force were in companies committed to IIP but the small employer had been overlooked, he insisted.

"Only 8,000 companies with fewer than 50 employees are in. They need the financial incentives."

Plans to issue "smart cards" - account cards with updatable computer-chip memories - to every holder of an individual learning account, are certain to be attacked as a gimmick.

A backlash is expected within the party since the first draft of the policy paper, which was called Training and Learning for Work, was condemned by some as "ultra-Blairite" and "excessively voluntaristic". The Skills Revolution has even more of leader Tony Blair's fingerprints on it.

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