Lord Mandelson: Diversity in education remains key to Britain's economic future

Higher education and further education are two systems joined by one goal. There was a time when our university and vocational training systems were seen as having distinctly different functions. Universities provided elite education and a training in the mores of professional life for about one in 20 of the population. Apprenticeships were for craftspeople – or rather craftsmen – who would go on to spend their lives in a particular trade. These were regarded not as different ways of making a living, but as different universes.

It was a division based on social prejudice as much as economic reality, and if it isn't yet dead, it needs to be. Obviously universities and the further education system do not do the same job, teach at the same level or specialise in the same ways. But they have the same essential role which is building human capacity and higher skills.

Modern craftspeople will play a critical role in our economic future and are increasingly doing some of the highest value-added jobs in the UK economy. They are the technicians, designers and engineers who are the foundation of the UK's advanced manufacturing sector. Teaching the practical skills in process management, IT and numeracy that are increasingly needed at all levels of employment is something that the further education sector has pioneered.

The huge expansion in UK apprenticeships has been one of the great achievements of this government, even though we recognise that we need more apprenticeships at higher levels to help address shortages in areas like skilled technicians.

Although I disagree with the CBI on the suspension of the 50 per cent target for HE, I agree that it should never alone be the proxy for whether Britain has the high level skills needed to compete in a globalised world. We are right to insist on continuing to widen access to university education and we are right to invest heavily in making our university system and the research it does the best in the world.

But we also need to see the alternative routes to higher skills provided by apprenticeships and further education as no less valuable. We need to work for that convergence between the wider goals of the two systems.

Taken from a speech to the Confederation of British Industry's Higher Education summit by the Business Secretary yesterday