Business leaders have dismissed the debate over A-level grade inflation as a 'wild goose chase'.

They said a lack of basic skills among school leavers was the biggest threat to future economic prosperity

The overall A-level pass rate has risen for the 22nd consecutive year and now stands at 96 per cent.

Two schools in Sussex achieved 100 per cent pass rates.

But Tony Mernagh, executive director of the Brighton and Hove Economic Partnership, said business was more concerned with the 'nitty gritty'.

He said: "In Brighton and Hove the major challenge is increasing the number of children who pass five GCSEs because business needs people who can read, write and add up.

"We also need to see people with more vocational skills, especially in construction.

"And there are projects further afield - Terminal Five at Heathrow, for instance - which threaten to suck all the skilled builders out of Sussex, so that could be a real problem.

"Making sure workers have all the basic skills is more important than whether or not A-levels are easier."

Nigel Bourne, the Confederation of British Industry's South-East regional director, said exam reform was low on employers' priority list for education.

Firms wanted higher levels of literacy and numeracy, more teachers with better qualifications and more students taking modern apprenticeships.

Mr Bourne said: "Grade inflation is an important issue for some universities, but claims that employers are hugely worried are wildly overdone.

"They are more worried by the real education scandal, which is the number of students who come out of the system totally unprepared for today's world of work.

"There are too many young people who cannot read or write and do not understand the business world. That is where the education system is letting down young people."

The Federation for Small Businesses said students should not feel compelled to follow the "production line" of university and "conventional employment".

Education chairman Norman Mackel said: "The world of work has changed significantly and young people do have a choice.

"More and more people are seeing self-employment as the more attractive option."

Friday August 20, 2004