Jobs should be higher priority than inflation, says Beckett

MARGARET BECKETT reopened Labour's debate over economic policy yesterday when she said that job creation should be a higher priority than control of inflation or the state of public finances.

Her comments, at a meeting of the Full Employment Forum pressure group, seemed designed to mark out her more specific commitment to the reduction of unemployment than her rivals for the Labour leadership, Tony Blair and John Prescott.

But Mr Prescott will tomorrow launch his own targets for job creation, showing how the unemployed could be put back to work if the Government's economic priorities were reordered. Employment should, Mr Prescott will argue, be seen as an economic indicator like inflation or growth.

These targets for job creation could be achieved through co-ordinated job programmes ranging throughout the public sector including housing and transport. Mrs Beckett, Labour's acting leader, told the meeting at the London School of Economics: 'Of course the next Labour government will have to take account of growth, our balance of payments, inflation, the state of our public finances, the exchange rate and interest rates.

'But there must be a bias towards full employment.'

That pledge was seen by Mrs Beckett's backers as a more concrete commitment than that made by Mr Prescott on the issue because it singled out unemployment as the highest priority. Prescott supporters argue that his targets will provide a more tangible route to full employment than anything Mrs Beckett has outlined.

Mrs Beckett said that 'full employment must be given the highest priority' although she added that 'in running an economy it is important to take a balanced approach'.

Today the acting leader will appeal to vomen voters in the leadership elections when she addresses a fringe meeting at Labour's Women's Conference in Southport.

Yesterday Mr Prescott, speaking in Sheffield, said: 'The implication of Kenneth Clarke's Treasury forecast last week is that mass unemployment of 2.5m or 3m will continue into the next millennium. It means Britain will enter the 21st century with the Tory standards of the 19th century. We must get our people back to work using the money it costs to keep them on the dole.'

Meanwhile there were indications that Mr Blair, the favourite to win the Labour leadership, is preparing to take the party into the next election with a new package of tax reforms, designed to win greater public trust on Labour's management of the economy.

Mr Blair is backing an examination of the principle of hypothecation - whereby the proceeds of taxation are earmarked for specific spending programmes, particularly health and education.

The initiative draws on work from the Shadow Chancellor, Gordon Brown, who is drawing up plans for a conference on hypothecated taxation in the autumn.

Labour's health speokesman, David Blunkett, has also backed the idea as a means of boosting spending on the health service. Mr Blair last week stressed that the burden of taxation on all but the highest earners should not be increased. That means that some existing tax revenue would be allocated to specfic schemes, rather than hypothecation being used to raise additional amounts of money.

Leading Labour figures believe this would help them ensure a much greater openness and accountability in the way tax-payers' money is spent.

View from Labour's heartland,

Sunday Review