Plans to enforce compulsory education or training up to the age of 18 have as much to do with economics as education.

As the Lord Leitch’s review on skills stated last year, Britain’s businesses will need ever more skilled employees if they are to remain globally competitive.

Britain already trails far behind countries such as France, Germany and the US in terms of productivity and basic skills and ranks a miserable 20th in the OECD rates for the proportion of youngsters staying on at school.

So the real question facing ministers as they contemplate what could prove to be the most radical educational reform in a generation is not whether Britain can afford to raise the school leaving age from 16 to 18, but whether it can afford not to.

At the same time, there is widespread recognition that it would be counterproductive to force non-academic teenagers, who may have decided that school is simply ‘not for them’, to struggle on with academic courses in the class room.

The trick for the government will be in finding appealing alternatives for the 200,000 or so 16 and 17-year-olds who are currently classified as Neets (not in education, employment or training).

Although the proportion of 16 to 18-year-olds in education has risen since Labour came to power in 1997, the number of Neets has also increased.

As the Tories have pointed out, this is because the increasing numbers in education have come from those who already had jobs, rather than from the ranks of the unemployed.

Labour has spent a lot of effort tackling the Neet problem, but with limited success. More than 40 per cent who start apprenticeships never finish them, while nearly 50 per cent of young job seekers who have left the New Deal for Young People end up back on benefits within a year.

Employers and educators will have to work hard to ensure that all new training offered to 16 and 17-year-olds appeals to those who have been completely “switched off” by school.

The financial inducements on offer will also have to be worthwhile. The government has said it will phase out the means-tested Educational Maintenance Allowance of £10 to £30 a week paid to 400,000 16 and 17-year-olds who stay in school and replace it with another form of ‘training wage’.

Details on this are sketchy, although the Government’s preferred option is likely to include a basic allowance for those who turn up to training, plus ‘bonus’ payments for those who gain qualifications and demonstrate progress.

So much for the incentives. Alan Johnson, the Education Secretary, has made it clear that there is no point introducing a new compulsion for education or training unless the government also demonstrates that it is willing to get serious about enforcement and sanctions.

This is why he is proposing to impose criminal action and £50 penalty fines on what he expects to be a small “hardcore” of teenagers who drop out of education at 16 and refuse to go back.

This will be accompanied by a light-touch approach to employers, parents and schools, who will merely be expected to support young people in staying on in education and training.

While employers organisations have broadly welcomed the new plans, it is less clear what young people themselves think. Among those aged 16 to 24, 62 per cent “strongly agree” that it should be made compulsory to remain in education and training to 18, compared with 76 per cent of the population at large, according to the Government’s own polling.

This is why high quality careers advice will be essential so that teenagers are made fully aware of the options open to them, what is expected of them and the value of training.

Times Recommends

• Times Christmas appeal: Letter from the Editor
• Conferences — what a waste of money
• Schools supremo learns a painful lesson