Provision of jobs 'must become the EC priority': In his fourth and final Durham lecture the Labour MP Frank Field yesterday spelt out how he believed a start can be made on restoring full employment

A PACKAGE of measures, including changing the national insurance system and using productivity increases to provide new jobs, not higher wages, was proposed yesterday by Frank Field.

Such domestic action, he said, must include concerted action in Europe where providing jobs 'must now become the number one priority'.

In his final Durham lecture, the Labour MP for Birkenhead warned that 'restoring full employment is no easy objective'.

Four key barriers existed: the 'staggering' level of government borrowing, likely to rise to pounds 50bn, combined with the threat of a balance of payments crisis; the 'whirlpool' of currency speculation; the lack of medium-term industrial investment; and the threat of inflation if the economy is reflated to move towards full employment.

But the first intellectual challenge, he said, was to get unemployment back on the agenda of economists - who in the main seemed 'hell bent on ignoring it'.

Labour should set up a commission on economic opportunity, alongside its Commission on Social Justice, which was 'essentially an exercise about dividing the existing national income more fairly', to help do that.

The Government should create an economic advisory committee to undertake the same task, demanding more research on how to solve the problem, while it should also look beyond Britain to create more demand. The EC, he said, should invest in a Marshall Plan- style programme for Eastern Europe and Russia to expand export markets. That was 'as morally important as it is economically sound'. And equally, it should help Germany with investment in the former East Germany to restore growth and lower interest rates there.

At home, the 'cartel' of the employed against the unemployed must also be challenged, when wage settlements about productivity increases were keeping the unemployed out.

The German trade unions, he said, were considering offering wage freezes in return for productivity increases being used to create jobs. 'The consequences would have to be spelt out,' Mr Field said. It would mean a real wage cut of 3 per cent a year at current inflation, in return for cutting the dole queues. 'Is that a price workers would pay? I believe it is.'

Employers' national insurance, Mr Field said, should be payable on the first pound of workers' earnings - not coming in at pounds 52 a week. For its present operation was 'a tax on the creation of full- time jobs'. While some wished to work part-time, all but 42,000 of the 1,077,000 increase in the workforce between 1981 and 1989 had been part-timers.

And in Europe - where reducing unemployment had to become the priority - a VAT cut should be sought to boost trade, and public spending aimed at job creation should be exempted from the convergence requirements of the Maastricht treaty. Lastly, a common European tax on currency speculators was 'long overdue'.

Mr Field said these were 'first thoughts' on what should be done to overcome the view of many that full employment was now impossible. It had to be tackled, however, when the elimination of full employment as a goal 'has done more than any other single act by government to pauperise many of our fellow citizens and rob them of a sense of dignity and worth'.