Training is an investment in human assets rather than a cost on the business

Phil Willis

Employers would also receive financial incentives to provide on-the-job skills training.

Education and employment spokesman Phil Willis told the party's conference that Liberal Democrats were adopting a radical approach to jobs and education.

Setting out a Working for Success policy paper, he said a "new flexible guarantee" would replace existing measures to get people into work.

Time off to study

Young people would be allowed time off work for studying and wages would be paid only if the training related to the employer's business needs.

Workers could be paid while they train

Mr Willis argued that the New Deal had failed to "magically tackle" skills shortages.

"We would scrap the New Deal immediately. We would replace it with a new Flexible Guarantee," he said.

"This guarantee would ensure a Gateway for All with each jobseeker having a personal adviser."

Mr Willis said he wanted to see learners able to move between further education and higher education.

Learning accounts

A single life-long learning and training organisation - the National Learning Council - would channel money into Individual Learning Accounts "to give people real power over their learning".

He went on: "To incentivise skills training, we are proposing tax credits or national insurance deductions for companies working towards Investors in People, those introducing company training plans under the Skills for Small Business Programme or those training an employee to master trainer level," said Mr Willis.

And 16- to 19-year-olds would be entitled to an average of two days' per week study leave, while 20- to 24-year-olds would be allowed one day a week.

"Government must persuade employers that training is an investment in human assets rather than a cost on the business," said Mr Willis.