Labour unveils 'learn as you earn' scheme

Labour will today unveil a new pounds 300m training policy under which the state will pay pounds 150 into a new training "smart card" for 1 million employees to learn new skills - provided the worker contributes pounds 25.

David Blunkett, the party's education and employment spokesman, will unveil Labour's alternative training plan and risk a trade union outcry by dumping Labour's long-held commitment to a compulsory levy on firms which do not provide adequate training.

In the "Learn as you Earn" programme which Mr Blunkett will launch today, joined in a television link from the Staffordshire South East by-election by the Labour leader, Tony Blair, the combination of state and individual payments can be topped up by tax- deductible payments by employers and employees.

The second component of the scheme is an expansion of the existing "Investing in People" programme to smaller firms at a cost of a further pounds 150m.

The already planned scheme would provide significant tax credits to larger firms providing quality training. Mr Blunkett will argue it can be largely funded from pounds 200m unclaimed from the European Social Fund.

The two schemes, along with the already announced University of Industry to provide hi-tech on-the-job distance training to employees, are an alternative to the training levy which has been part of Labour policy for the last three general elections.

The new pounds 150-per-person grant is expected to draw a warm welcome from the CBI as a much better alternative than the old levy policy and has been discussed with the Training and Enterprise Councils. Labour says it can be largely funded from existing TEC budgets.

But the idea of an "individual learning account" may provoke hostility from some trade unions wedded to the idea of a levy - which would have forced revenue from employers not already providing training up to an approved level. The trailed decision to abandon the levy is yet another sign of Labour's steady dumping of traditionalist policies.

Labour's figures show that only one in five companies at present provides serious training and there are 7 million employed people without qualifications. Less than 25 per cent receive training up to the standards operated by the "Investing in People" scheme.

Because of the use of existing resources the scheme will be cited as another example of the "low cost or no cost" imaginative measures which Mr Blair recently exhorted shadow Cabinet members to come up with in a private letter.

Today's will be the first of a series of papers which the party will be producing between now and June. These will supplement existing policies and be distilled into a document which Mr Blair described yesterday as an "early version" of the party's election manifesto.

Labour NEC rejects 'terrorist' candidate

The Labour Party asked John Lloyd, its prospective candidate for Exeter, to stand down yesterday following allegations about his involvement in terrorist activities in South Africa.

The National Executive Committee accused him or providing misleading information after he failed to revealbeing a member of the African Resistance Movement, which opposed apartheid by bombing targets such as electricity pylons in the 1960s.