Speaking off-the-cuff at the Gramophone Awards dinner recently, his comments caused a stir among music professionals, who have long lobbied for a restoration of instrument teaching, decimated by education cuts.
Initial discussions with Education Secretary David Blunkett are expected to lead to the formation of a Schools Music Trust, which will lobby for funds from the National Lottery's New Opportunities Fund when that becomes operational next year. Leading lights from the cultural industries will be invited to spearhead the drive for matching funds from the private sector: likely names range from those of the major orchestras to Lord Lloyd-Webber and Sir Paul McCartney.
Those names suggest that while the classical side of the industry might hope that the Trust will help more young players to work in the heritage music business, the real thrust will be in filling the talent pool for rock and pop.
Top British stars surveyed by the current issue of Business Age magazine show David Bowie at the top of the wealth league with pounds 550m, while the youngest Spice Girl, "Baby" Spice, has pounds 14.5m at only 20. By putting the spotlight on music provision in schools, Mr Smith and Mr Blunkett are officially backing an effective pathway to motivate non-academic and disaffected students with popular idioms that are often ignored by educationalists.
This interest in school music falls within the Labour Government's wider thrust to promote British culture as essential to the nation's economic health. It is already one of the largest sectors, generating some pounds 50bn annually in turnover.
Inward tourism, attracted by theatres, museums, galleries and music, makes culture the third-largest earner of foreign currency. The 1991 census revealed that jobs in the cultural sector expanded 34 per cent in the 1980s, while jobs overall grew a mere 4.6 per cent.
Mr Smith has put together a Creative Industries Task Force, which will assess the needs of "UK Culture plc" in terms of new government policy, as well as identifying ways to maximise the economic impact of the culture industry.
"I envisage that the task force will carry out a rolling programme of studies dealing with different issues concerning the creative industries, and so provide a continuous stream of analysis and recommendations," said Mr Smith after chairing its first meeting on 8 October.
He was joined by ministers from key departments, including the Treasury, trade and industry, education and employment and the Cabinet Office. This will ensure cross-department co-operation with Mr Blunkett on such matters as the schools music initiative. Luminaries such as David Puttnam, Richard Branson, designer Paul Smith, Waheed Ali of maverick TV production house Planet 24 and others should earn the task force a welcome in those parts of the industry neglected by more traditional approaches to the role of the arts in society.