Balls: The end of school drop-outs

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Mr Balls accepted that many young people did not welcome the idea of being forced to stay on in school or training for jobs for an extra two years.

But today's 10-year-olds - the first who will be affected by the plans - must learn to understand the consequences of dropping out of school early, he said.

The minister called for "a culture change" to make it unacceptable that young people should be out of work and not studying aged 16 and 17.

In a speech to the Fabian Society in London, Mr Balls said a new Bill to be announced in the Queen's Speech represented a "historic" opportunity to transform education.

"The days where many people could leave school at 16 without qualifications and work their way up into a fulfilling and rewarding career are behind us," he said.

"We still have one of the lowest rates of staying on in education or training at 17 of any country in the developed world.

"Other countries are making fast progress. We now need to do more if we are to avoid lagging behind.

"If we don't act now to increase participation it will be the most disadvantaged young people in our society who will be the losers."

The Bill will see compulsory education extended to 17 in 2013, and then to 18 from 2015. Teenagers who refuse to stay on face spot fines of £50 or court action and a possible £200 fine under the plans.