Big interview: A better deal for over-16s - Dawn Primarolo, paymaster general

So in last week's Budget, Brown used his experiences of China as the backdrop for the Government's plans to reform financial support for 16- to 19-year-olds.

"With China and India producing four million graduates a year, I am convinced that the UK cannot afford to waste the ability of any young person," he told Parliament during his Budget speech.

Like her boss, paymaster general Dawn Primarolo also believes the answer lies in removing the financial barriers preventing many 16- to 19-year-olds from reaching their potential.

"Because of the way financial support has developed, young people are often being driven into employment by financial pressures," says Primarolo.

"There is a lot of pressure on families or the individual young person to have an income. But at the same time, young people do want to develop their skills. So we've looked at the barriers that are there and set a target of getting nine out of 10 of those aged 16 to 19 into education or training by 2015."

The Government has actually been building up to such reforms for some time. In last year's Budget it published Supporting young people to achieve: towards a new deal for skills, a consultation document setting out the draft ideas for meeting its 2015 goal. Now, a year on, the Treasury has unveiled its post-consultation plans in Supporting young people to achieve: the Government's response to the consultation.

Primarolo describes the reforms as consisting of five elements. First is the extension of child benefit and child tax credit to the families of unwaged trainees aged 16 to 19 on approved work-based training courses such as Entry to Employment from April 2006.

The second reform is to extend the entitlement to child benefit, child tax credit and income support to 19-year-olds who began courses before their last birthday. In addition to the above reforms, the Treasury also plans to offer disengaged 16- and 17-year-olds who sign up to an individually tailored learning plan, known as an Activity Agreement, a weekly allowance.

"We're allocating £60m over two years to pilot Activity Agreements and the linked allowances in eight areas in England," explains Primarolo.

Although the fine details will be settled by the pilots, which will begin in April 2006, Primarolo says the allowance is likely to be about £75 a week.

The fourth element of the reform is a plan to ensure 16- and 17-year-olds who are living independently are recognised as such by Jobcentres.

And under the final piece of the reform jigsaw, the Government will try out Learning Agreements that use financial incentives to encourage employers and their 16- and 17-year-old employees to enter training or education.

If successful these reforms will effectively raise the age at which young people stop learning from 16 to 18.

Primarolo says great care has been taken not to "unbalance" the benefits system, so that it encourages young people to enter education for financial reasons alone. But she believes the hardest part of the plan will be getting the information about these reforms out to young people.

"We've got to make sure we provide the support and advice that is relevant to young people," she says. "We have to tell them what options are available, and make sure they receive the right advice."

FYI

- Dawn Primarolo became the MP for Bristol South in 1987. In 1997, she was appointed financial secretary at HM Treasury before being promoted to paymaster general in 1999

- As paymaster general, she oversees the UK tax system, welfare reform, tax credit and the Treasury's involvement in childcare policy

- She is patron of the Royal Chelsea Hospital, Terrence Higgins Trust, Knowle West Against Drugs and Lifeskills Project.