Gordon Brown today promised sweeping welfare reforms to improve Britain's skills base as he warned that millions of workers face being left on the scrap heap.
The Prime Minister set out moves to help the out-of-work to undertake training and the unskilled to improve their promotion prospects.
In his first speech to the Confederation of British Industry as Prime Minister, he indicated he would press ahead with controversial moves to expand Heathrow airport, build new nuclear power stations and streamline the planning system.
He went on: "Just as we are modernising transport, planning, science policy, we are redefining the Britain welfare state for a wholly new world - to give people skills through transferring resources from welfare to education.
"Not leaving them dependent, reliant on benefits without the opportunity to improve their skills and prospects."
Mr Brown told business leaders there would be far-reaching reforms of the welfare state and the education system which would help "move claimants from passive recipients of welfare benefit to active job and skill seekers".
He said the "old system" no longer met the "aspirational society" Britain needs to be.
"Let us face facts - as a result of changes in the global economy, many of the jobs British workers do now are becoming redundant," he said.
"Of today's six million unskilled workers in Britain, we will soon need only half a million - over five million fewer.
"We have nine million highly qualified workers in Britain, but the challenge of the next 10 years is that we will need 14 million - five million more."
The Prime Minister said he had asked Skills Secretary John Denham and Work and Pensions Secretary Peter Hain to forge a new alliance of businesses, colleges and the education and voluntary sectors to drive forward the necessary changes.
Mr Hain is to announce moves tomorrow to contract - and offer incentives to - the private sector and charities to play a central role in JobCentre Plus functions.
Those signing on as unemployed will be asked to look at skills advice and training, which would be taken into account as part of their benefit entitlement, Mr Brown said.
Mr Hain is today set to announce reform of the so-called 16-hour rule, which restricts people over the age of 19 from claiming housing benefit if they study for more than 16 hours a week.
And Mr Denham is to announce a new "careers and advancement" service to help people to train whether in or out of work.
The premier said there would be an "intensification" of compulsion but also greater incentives for taking part.
Lone parents should train so they are ready to work when their children go to school.
He also promised a modernised incapacity benefit regime with help for those in need of education and training and medical help where mental health problems are an issue.
Communities Secretary Hazel Blears will later this week announce plans to home in on areas of high unemployment.
Mr Brown said: "If, in the old days, lack of jobs demanded priority action, in the new world it is lack of skills.
"So, as we prepare and equip ourselves for the future, many of the policies of the past are out of date, with no answers to be found in old dogmas - and long-term reforms changing the role of education and welfare - the responsibilities of the individual and government will have to intensify and be stepped up."
Amid increasing concern about the state of the economy and the fate of more than £20 billion of taxpayers' cash used to prop up ailing bank Northern Rock, Mr Brown insisted the Government had taken the "difficult decisions" to get inflation on track with tough public sector pay awards.
He added: "At the same time, when we have had to deal with the fallout from global turbulence with events at Northern Rock, we have taken difficult decisions to steer a course of stability and protect the taxpayer which have led to today's announcement by the company of a preferred bidder."
His comments came after Sir Richard Branson's Virgin consortium was this morning confirmed as the preferred bidder for the troubled mortgage lender.
Mr Brown went on that he would not take short-term measures to combat the current financial situation.
"In difficult times we have been able to and will continue to hold to a stable course, and I assure you that we will continue to take all necessary measures to ensure that in future we maintain our hard-won stability.
"We will take no risks. There will be no irresponsible relaxation of pay discipline, no unfunded spending commitments, no unaffordable promises and no short-term giveaways.
"By definition, responsible government demands that stability will be our first priority - yesterday, today and tomorrow."
Mr Brown said the Government would continue to invest in major projects, such as the £16 billion Crossrail scheme.
The Government would press ahead with the expansion of Heathrow and tomorrow set out plans to streamline the planning system, the Prime Minister said.
He repeated that new nuclear power stations "potentially" had a role to play in tackling climate change and improving energy security, and a final decision would be announced early next year.
On the environment, Britain was committed to reducing carbon emissions by at least 60% by 2050.
Following recent disquiet about the scrapping of taper relief on Capital Gains Tax, Mr Brown said he would continue to "listen and discuss" business concerns about it.
Following his speech, the Prime Minister found himself under surprise attack during a question-and-answer session.
From among the sharp-suited captains of industry, Bernard Howard - a farmer and haulier from Northamptonshire - emerged to deliver an impassioned tirade against the "fiasco" of Mr Brown's Government.
After denouncing the "folly" of the Government's failure to support the farming industry, he warned of a new wave of militancy among road hauliers as the price of diesel hit £1.20 a litre in London.
"Are you aware, Prime Minister, that the road hauliers are gathered together to go out in the country and show their muscle?" he asked as Mr Brown smiled uneasily.
"The meetings are taking place all this week. There is one in Consett tomorrow night. The strength of the road hauliers is on the march."
He ended with a demand for the resignation of Chancellor Alistair Darling for "his incompetence of the loss of the discs, the incompetence of the support of the British farmer and the incompetence of supporting road hauliers".Reuse content