Across the EU we know that by 2020, 16 million more jobs will need high qualifications, while the demand for low skills jobs will drop by 12 million. This is where those who argue against the previous Labour government's 50% higher education target are misguided. Upskilling a workforce isn't a zero sum game.

In Liverpool we've made massive strides at GCSE - all the indications from summer 2012 point to an elimination of an attainment gap compared with the rest of England. But over 17% of the working age population still have no qualifications whatsoever - in an economy where 5 good GCESs including English and maths is becoming the minimum entry level.

There's still a persistent gap at Level 3 and there's too many young people not in employment, education or training. Coupled with this, Liverpool also has too few graduates when compared with other big cities. Given the relatively low starting point, the trend towards a more skilled economy could be disastrous for cities like Liverpool, if we do nothing.

That's why Miliband's proposals announced today should be welcomed.

It was right to recognise the centrality of maths and English skills in VET, as well as academics pathways. The post-16 Technical Baccalaureate (TechBacc) proposed has maths and English alongside a technical qualification and work based learning - something highlighted in the 2011 Wolf Review. It is right that the next Labour government recognises the significance of poor numeracy and literacy skills as a barrier to labour market entry and progress. This will be important to give VET the parity of esteem with academic pathways.

It was also right that VET becomes much more responsive to employer demand. The proposal to give employers more say on how the £4.6 billion skills budget is crucial. This will help make skills provision more responsive to future demands, especially in the new economy like low carbon and creative industries. In Liverpool the Employer Ownership of Skills pilots as part of City Deal 2 will begin this process, by combining existing pots of funding together.

But there's more ideas Labour should be exploring for the forgotten 50%.

Labour should be proposing even more freedoms and flexibilities for our cities on skills funding. City mayors especially, but local government leaders in general are uniquely placed to be an interface between employers and training providers. A future Labour government should explore a greater role for cities in determining, commissioning and influencing the devolved skills budgets. There are different labour markets in different city regions and this would recognise that one size doesn't fit all.

Labour should be embracing and expanding University Technical Colleges (UTCs). These are a new type of higher education/private sector sponsored high-end 14-19 VET institutions each specialising in a particular industrial sector with 34 open or in development - including three in the Liverpool City Region. The impact of UTCs could be huge. Labour should look at expanding the number and focus of UTCs. A goal for the next Labour government could be to open another 150-250 UTCs with existing schools converting into UTCs with closer links to business than the schools they replaced. This would allow far more young people who choose to do so to transfer to VET at 14 as well as at 16. Only a small minority UTCs specialise in sectors other than engineering. In Liverpool a UTC will open next year specialising in life sciences and Salford's MediaCityUK UTC will have a creative and digital focus. Labour should further open up the focus of future UTCs into these and other growth sectors where there are identified skills gaps.

We should also revive the idea of a 14-16 TechBacc in UTCs, with 60% of students' time taken up with GCSEs in English, maths, science and one other subject and 40% with a technical qualification. This would put the 14-16 TechBacc on a par with the academic route EBacc and allow UTCs to innovate more.

Labour needs to be bold on VET. Anything less will hamper future economic growth prospects. To do that we'll absolutely need to improve the quality of vocational pathways so that they're no longer viewed as second chance qualifications. There are too many "low-level vocational qualifications, most of which have little to no labour market value", as Wolf put it. This is economic madness and bad social justice.

Nick Small is Liverpool City Council's Cabinet Member for Employment, Enterprise & Skills, he tweets @cllrnicksmall