George Osborne has committed the Conservatives to achieving full employment as the party seeks to convince voters that spending cuts are not its only priority.
He repudiated the words of the former Tory Chancellor Lord (Norman) Lamont, who said in the 1991 that joblessness had been “a price well worth paying” to get inflation down. Mr Osborne declared: “Jobs matter – mass unemployment is never a price worth paying.”
The Chancellor’s move will be seen as an invasion of Labour’s natural territory and an attempt to revive Tory support among working class voters, especially in the North and Midlands. Some Tory MPs and activists have been demanding new policies to tackle a perception that their party is “for the rich.”
Mr Osborne’s new target would imply the creation of about 1m jobs. Speaking to workers at Tilbury Port in Essex, he said his "ambition" was for Britain to achieve the highest employment rate of any of the developed nations of the G7. He wanted the UK to be “best place in the world to create a job, to get a job, to keep a job, to be helped to look for another job if you lose one.”
The Chancellor recalled that it was 70 years ago when Winston Churchill made the first commitment to full employment during the Second World War. He rejected the position adopted by the post-war Labour administration that the Government could guarantee everyone a job. "As we learnt again recently – you can't abolish boom and bust,” he said. “Attempts past and present by governments to guarantee a job to every person are doomed to fail. There are always going to be ups and downs to the economic cycle.”
Mr Osborne added: “ Spending billions of pounds creating jobs in the public sector doesn't work either. You end up with more people unemployed instead of less. Then the politicians who make these guarantees get into a panic. So unemployed people are pushed on to sickness benefits to hide the real numbers.”
He argued: "A modern approach to full employment means backing business. It means cutting the tax on jobs and reforming welfare."
Labour has previously defined full employment as 80 per cent of the working age population being in work. Chris Leslie, a Labour Treasury spokesman, said on Monday that Mr Osborne has announced the right aspiration, but added: "A lot of this rhetoric is not matched by the reality. He should tell this to the 900,000 young people who have been out of the work for more than 12 months or more. Long-term youth unemployment has doubled under his watch. It's an apology he should have been giving."
Frances O’Grady, TUC General Secretary said: “If George Osborne wants to achieve these important objectives he needs to address the living standards crisis and secure fairer wages, especially for low-paid workers, not cut their tax credits. Benefit cuts are not the route to full employment.”