Release of Prescott jobs paper urged: Full employment document shows a firm commitment to Europe, report Nicholas Timmins and Colin Brown

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SUPPORTERS of John Prescott last night demanded the publication of a policy paper for full employment, which could play a prominent part in the Labour leadership election.

Mr Prescott's camp, angered at delays in the publication of the paper, pressed Larry Whitty, the party's general secretary, for it to be released early next week.

Although it will be published as a national executive committee paper, Mr Prescott was one of the principal authors. His backers believe it shows he has a radical agenda, and a firm commitment to Europe, in addition to traditional Labour values.

A temporary work programme for up to a year for the long-term unemployed, the right to training and education for up to a year while still on benefit, and incentives for private employers to create genuine jobs for the long-term unemployed are trailed in the paper, which commits Labour to the 'twin principles' of 'full employment and social justice'.

Just as 'work and welfare' rallied support to Labour's post-war social and economic revolution, the report says, 'jobs and social justice' is the new battle cry for reversing 15 years of Tory economic decay and social attrition.

But the paper, a response to the European Commission's Green Paper on social policy, is firmly pro-European, stating that in the modern world 'national governments can no longer work in isolation' and that any recovery 'must be a co-ordinated recovery within a new European framework'. Europe 'urgently needs a European- wide strategy for jobs and social justice'.

The paper spells out some of Labour's 'new economics', welcoming the re-emergence in Europe of Keynesian ideas while arguing that alone they are no longer enough. 'In order to secure full employment it is no longer sufficient to manage demand. Failure of demand can still lead to a recession and hinder a recovery, but a failure of supply - in investment, training and education, capital stock and infrastructure - can cause chronic economic weakness, a loss of comparative advantage and consequent high levels of unemployment. A synthesis between demand management to compensate for cyclical failures of demand, and supply-side reforms to remove or reverse structural deficiences in capital and labour, is what is therefore required in the new economy of the 1990s.'

Given the ease with which the Conservatives overturned the achievements of previous Labour governments, the paper says, entitlements should go beyond statute law into a Bill of Rights and a new charter of rights at work to go with the Maastricht social chapter.

Measures to achieve the 'high and stable' level of employment promised by the 1944 White Paper on employment include relaxing the 21-hour rule to allow those on benefit to undertake vocationally relevant training or education for up to a year; an emergency re-employment programme for the long- term unemployed - the report says - 'we should seek to abolish long-term unemployment' - and a search for incentives for additional private sector recruitment from the long-term jobless.

Labour should also 'aim' for nursery education for all three- and four-year-olds, and should follow guarantees of training for 16- and 17-year olds with a commitment to lifelong education and training to provide skills. Alongside measures for full employment would go a renewed commitment to the NHS, a revamped social security system and strengthened civil rights.

The paper argues: 'Economic efficiency and social justice are inseparable. One cannot develop at the expense of the other nor can one develop efficiently in the absence of the other. A competitive, fully employed economy sets the basis for social equilibrium'.

Leading article, page 10

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