Britain’s young workers are among the lowest achievers at GCSE or equivalent in a league table of countries published today.

The results show that Britain has plummeted to 22nd of 29 countries, from 14th place 40 years ago, despite its pupils attaining ever-higher grades. They raise fears that an underclass is emerging, increasingly unsuited to the job market as manual work declines and competition grows from abroad.

While 97 per cent of South Korean students were awarded the equivalent of five good GCSEs, only 73 per cent of British exam candidates achieved the same results. They were surpassed by those educated in the Czech Republic, Slovakia, Australia, Canada, Ireland, Scandinavian countries and much of Western Europe.

Education experts say that in a growing global economy teenagers who do not achieve a good secondary education will become marginalised and increasingly impoverished. The report, by the Organisation for Economic Co-operation and Development, said: “A comparatively large share of individuals in the UK did not complete upper secondary education and face considerable and increasing penalties in the labour market. For those, employment rates are, at 60 per cent for men and 45 per cent for women, below the corresponding OECD averages.”

It added that the gap between jobs available to candidates with a good education and to those without qualifications had widened in Britain in the past decade. The employment rate for those without good GCSEs fell from 61 per cent in 1995 to 52 per cent in 2004 and 35 per cent of people not attaining this academic level earned half or less of the national average.

Andreas Schleicher, head of analysis for the OECD education directorate, predicted polarisastion between the university-educated and those who failed to achieve a good secondary education. “It is an issue of globalisation,” he said. “The average British citizen has to compete with the best-educated people in China. Those with poor qualifications will find it harder and harder. There have been huge changes in the labour market and the prospect for those without good qualifications is declining.”

The annual report on educational standards compared the qualifications at age 16 of people now aged between 25 and 64. The number of British men and women who attained the equivalent of five GCSEs at A to C grade had risen from 60 per cent among those leaving school 30 or 40 years ago, to 73 per cent for those aged 25 to 34. Improvements in other countries had soared, however, pushing Britain from 14th to 22nd in the table. Only Turkey, Spain, Iceland, Italy, Portugal, Poland and Mexico scored lower.

The report also found that Britain had one of the largest gaps in earnings between those educated at university and non-graduates. It said: “In the UK the earnings advantage is 77 per cent, a very high level. Only five countries have higher earning differentials.” Having a university education enhanced women’s earnings more than it did those of men, but only in Britain. Women’s pay was still, however, much lower than that of their male counterparts.

The report also questioned 15-year-olds across all the countries to find out how many intended to go to university. Only 32 per cent of British respondents wanted to study for a degree, one of the lowest levels of all countries.

Government spending on British universities rose by only 6 per cent in ten years, the second lowest in the ranking of 29 developed countries, while private spending soared, rising by 85 per cent during the same period, 1995 to 2004, the report by the Organisation for Economic Co-operation and Development found. It said that Britain was losing out to other countries in its attempt to produce more graduates. Its figures show that Britain slipped from having the third-highest proportion of graduates per age group in 2000 to tenth in 2005.

The public-private funding trend was also reflected in schools, the report found, adding: “At all levels of education, private spending in the UK rose faster than public spending.

— More money is spent on preschool education in Britain than in any other developed country, according to figures published today. Almost £4,000 per child was spent at nurseries and preschools catering for three and four-year-olds in 2004.

The amount tops the league of spending by 25 countries, compiled by the Organisation for Economic Cooperation and Development, and is much higher than the £2,375 average.

The report’s authors could not say whether such early education was effective.

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