HM Treasury News Release
154/98                                       22 September 1998
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       SKILLS - A VITAL LINK TO IMPROVING UK PRODUCTIVITY
                                

"Improving skill levels is critical to improving UK productivity
and therefore to growth and higher living standards for all."  This
was the message from the seventh in the series of seminars aimed at
boosting UK productivity. 

The seminar was hosted by the Chancellor Gordon Brown, the
Secretary of State for Education and Employment, David Blunkett,
and Secretary of State for Trade and Industry, Peter Mandelson.

It was addressed by Larry Katz, the distinguished US economist and
former chief economist to the US Department of Labor and looked at
how the generation and utilisation of skills affects UK
productivity performance.

Commenting, the Chancellor said:

"Improving skill levels is critical to improving UK productivity.
To keep pace with the rapidly advancing needs of technology we need
more and better skilled people. This means that we need training
that is flexible, innovative and responsive to the needs of
business and employees. Public and private sectors must work
together to ensure that we have an education and training system
that delivers."


Mr Blunkett said:

"Raising the skill levels of the workforce is one of the
government's central economic objectives. Skills are the key to our
future economic prosperity, bringing better jobs and higher living
standards. We have made a good start in raising standards in our
schools and in developing lifelong learning. But I want us to
continue to improve, working with employers and employees. The
Skills Task Force, which produced its first report this month, will
help us identify  where the main skills gaps are and how they can
be bridged."

Mr Mandelson said:

"Peoples' knowledge and the ability to share and exploit it will
become increasingly important, as we move towards a knowledge
driven economy. To meet the demands that this will place on both
the workforce of today and of tomorrow, we have to place a higher
value on skills and the acquisition of knowledge than we currently
do. It is only by building on and using people's skills that we
will be able to compete effectively."


Notes for Editors

The seminars in this series are focusing on how to bridge the
productivity gap between Britain and our main competitors, up to 40
per cent behind the US and around 20 per cent behind Germany and
France. The seminars will inform the Competitiveness White Paper,
PreBudget Report and the 1999 Budget.

The seventh seminar was held today at 11 Downing Street and looked
at the role of skills and the education and training system in
driving productivity growth. It included a presentation given by
Larry Katz, the Harvard academic, and former Chief Economic Adviser
to the US Dept of Labor.  Richard Layard, of the LSE, and David
Soskice, of the No 10 Policy unit, responded.

This work is being conducted jointly by the Treasury and DTI.   
Press enquiries should be directed to the Treasury (0171270 5188)
or DTI (0171 215 5981).   Non-press enquiries should be directed to
Richard Thomas in the Treasury (0171 270 4465) or to Tony Pedrotti
in the DTI (0171 215 6350).



# = pounds sterling