Major breaks with Thatcher to back full employment goal

THE Prime Minister has given the first government commitment to a policy of full employment for more than a decade.

In reply to a recent Commons question from Clive Soley, Labour MP for Hammersmith, John Major said that every prime minister wished 'to achieve full employment'.

Mr Soley followed up that answer this week, asking Mr Major to define the full employment he sought to achieve. Mr Major replied yesterday: 'The Government pursues policies designed to achieve high levels of employment, consistent with low inflation. Measures to make the labour market competitive, flexible and efficient are an essential part of this.'

An all-party consensus was built around a pursuit of full employment after the 1944 White Paper, Employment Policy, defined it as 'the maintenance of a high and stable level of employment after the war'.

That definition was refined to an average of 3 per cent of the workforce by Sir William Beveridge, and Hugh Gaitskell put it at a lower '3 per cent at the seasonal peak' when he was Labour Chancellor in 1951.

The policy was maintained as an aspiration through to the late 1970s, but it was dumped by the Thatcher administration - a retreat Labour followed under Neil Kinnock in the 1980s, when unemployment peaked at 11 per cent. With 3 million out of work at the latest count, the current level of unemployment is 10.6 per cent, up from 5.6 per cent in April 1990, when there were 1,596,000 people out of work in the UK.

But the issue of full employment is now being revived by the Employment Policy Institute, which is planning a year-long campaign in the run-up to the 50th anniversary of the 1944 White Paper in May next year.

It said this week that policy-makers should adopt the end-of-century goal of eradicating long-term unemployment - more than a million have been out of work for more than a year - with job guarantees.

John Philpott, the institute's director, said yesterday: 'The Prime Minister's desire to secure a high level of employment is to be encouraged. But his answer implies a continued willingness to resort to unemployment as an anti-inflationary tool if need be. Only when full employment is an explicit policy goal can we be certain that government will be equally tough on inflation and unemployment.

'Mr Major must therefore set a target for reducing the unemployment rate to 4 per cent of the workforce by the turn of the century.'