Peter Mandelson: We've forgotten our first priority: education

It was no accident that New Labour came to power with education, education, education as our number-one priority. Of late, though, this commitment seems to have become eclipsed by alternative priorities. I believe education must return to the political front line.

It was no accident that New Labour came to power with education, education, education as our number-one priority. Of late, though, this commitment seems to have become eclipsed by alternative priorities. I believe education must return to the political front line.

For this government of all governments, education has to be the passion of our politics. As modern social democrats, education policy contributes to our economic policy, employment policy, anti-poverty policy, crime policy, even our health policy. But there is another, even more fundamental reason why we need to maintain education's pride of place in the New Labour pantheon.

The Government has made a good start in tackling economic inequality through measures of income distribution. Yet the key to combating social inequality is not raising incomes in the short-term, but transforming life chances, giving young people in deprived areas the chance to escape the limits of their birth and background and fully realise their potential.

The Government, in its first term, made a flying start in ploughing resources into primary schools and levering up standards of attainment. But despite this continuing momentum, has the education priority been displaced by the Government's commitment to the NHS?

I believe it has not. The 2002 Budget provided a five-year financing plan for the NHS, providing additional resources through increased National Insurance contributions to pay for better services. It is the best means of providing healthcare to every citizen, and it was the right thing to do. But looking ahead, of the £10bn "new money" available in 2003-4, beyond the increases in public spending already planned (which includes 5.5 per cent real growth for education), £4bn of this will go into tax credits for the poor; £2.8bn for health and social services; and £2bn for other contingencies. This leaves £1.2bn for everything else – defence, transport, fighting crime and education.

The Chancellor promised significant additional resources for education when he was delivering his Budget this year but, in the light of these figures, this will be challenging. I think it would be a mistake for the Government to allow its passion for education to be undermined by a shortfall in resources. As I argue in the newly published Blair Revolution Revisited, New Labour does not lack achievement, but its values and core mission have come across to the public as lacking sufficient definition and depth.

In particular, it appears to lack a robust strategy to tackle social inequality. By renewing and deepening its belief in radical educational change, the Government can demonstrate its commitment to genuine social mobility. To achieve this, education requires a step change in sustained investment.

Education spending is presently growing at roughly double the growth rate of the economy as a whole. We must maintain that growth. The UK share of national income going to education is 5.1 per cent. In my view it needs to rise to at least the OECD average of 6 per cent. Extra resources on this scale are necessary to transform educational quality, but on their own they are not enough. Sustained improvement in standards can only be achieved through big and bold reform of the system.

Every pupil in the most deprived areas of the country should have access to a top-quality secondary school combining world-class facilities with high quality teaching and state-of-the art learning tools. That means many more city academies, secondary schools that work with local education authorities but are independent of their control, and may have private-sector partners to test new ideas and drive innovation. Around 20 such new-build or refurbished schools are currently planned: we should aim for a city academy in every major town and city by the end of the decade.

We should also radically increase the number of bright graduates who enter teaching and remain in it for their professional careers. In addition to higher starting salaries, the Government should offer equity stakes in homes for teachers and ensure that housing trusts provide high-quality accommodation (especially in London), write down tuition fees and student loans for teachers, and make greater use of performance-related pay and higher rewards for senior teachers.

Greater social equality demands that the Government should continue to strive towards its target of 5 per cent of 18-30 year olds participating in higher education by 2010, but we also need targets and world-class training for the other half. I have seen in Hartlepool the case for developing a new national system of apprenticeship – high-quality structured training programmes that enable young people to learn while they earn and gain a real skill. They can then progress up the occupational ladder or enter higher education.

For Britain to succeed in the next decade, both in its economy and society, education must remain our number-one priority. A transformed, world-class education system must be the lasting footprint we leave on Britain.

The author is the Labour MP for Hartlepool. His book 'The Blair Revolution Revisited' is published by Politico's (£9.99)