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This chapter discusses the relative status of basic skills in the UK, using data taken from the 1995 International Adult Literacy Survey (IALS), and that of vocational qualifications, using data from the Labour Force Survey for 1993-2001. Analysis of these data sets reveals that, compared with other European countries, the UK has a high level of adults with poor literacy skills, that those with good literacy and numeracy skills enjoy a higher wage premium, and that there has been a small recent increase in the proportion of adults holding at least intermediate vocational qualifications, though returns to vocational qualifications do not appear to be large. The main recommendation is that the National Vocational Qualification (NVQ) framework be redesigned so as to improve the perceived low status of qualifications below level 3.