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Labour pledges study for stakeholders

The Labour party is considering radical reform of the way further and higher education is funded. It has also confirmed its commitment to a new "university for industry" - a sort of Open University on the information superhighway - which would enable people, regardless of age or employment status, to acquire skills needed by the economy.

In a lecture at the Cardiff Business Club on Monday, Shadow Chancellor Gordon Brown put flesh on the controversial bones of Tony Blair's "big idea" - the stakeholder society. He said he and education spokesman David Blunkett would shortly be publishing detailed proposals.

"State support for education beyond school used only to be a standard grant paid to a few - with the rest excluded," he explained. "In future, it will take the form of active government empowering people to study . . . throughout their working life."

The structure of the university for industry, reminiscent of Harold Wilson's pre-election announcement of the Open University in 1963, is still being discussed, but it looks likely to be an umbrella allowing other institutions to analyse training needs and provide vocational courses. Students, who could range from single mothers on benefit to executives seeking new skills, would study at home via their computer or at local open-learning centres.

Josh Hillman, one of the researchers developing the scheme at the Institute of Public Policy Research, the left-leaning think-tank with close links to Labour, said most of the money would be expected to come from the private sector. Several companies were already working on the proposal.

The idea of "individual learning accounts", paid for by industry, the government and individuals, on which people draw throughout their lives to pay for further education and training, was originally floated by the Labour-backed Commission on Social Justice in 1994. Mr Hillman said the IPPR envisaged that these accounts would replace current funding mechanisms for all post-16 education, but emphasised this was not necessarily the view of the Labour Party.

"These new ideas are very much in tune with the stakeholding society - making people stakeholders in their own learning and giving companies a stake in the education system," he said.

The "stakeholder" concept has been ridiculed by Tories and critics on the traditionalist wing of the Labour party.

John Major and Michael Heseltine have said the idea heralds a return to "corporatism, red tape and recalcitrant unions", while Michael Portillo suggested it was merely a synonym for Thatcher's property-owning democracy.

On Tuesday, David Blunkett told the Commons that it was the only alternative to the Tories' "Burger King economy", while Education and Employment Secretary Gillian Shephard retorted that it would drive "a stake right through the heart of British enterprise". The Liberal Democrats protested that the idea had been stolen from them.

However, researchers at the IPPR claimed their search for ways to include, educate and train the disaffected millions is what puts clear red water between stakes and shares.

* A summary of these ideas is set out in Options for Britain, (Dartmouth Publishing Company, Pounds 17.50) a collection of essays detailing policy options for an incoming government after the next election.

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