Brown pledges Labour to full employment

THE CREATION of a 'full employment society' was pledged yesterday by Gordon Brown, the shadow Chancellor, in a speech warning of battles ahead as Labour firmed up its policies on taxes and spending.

The return to a firm Labour commitment on full employment - a matter of post-war consensus until Margaret Thatcher initiated its burial in the 1980s - will be welcomed in the party and beyond. Mr Brown's statement of macro-economic principles, while limited to four paragraphs in a London speech, could also help to quell party criticism that the leadership was taking too long to recover from the election defeat.

Building on John Smith's recent warning that Labour would have to be ready to dump long-standing dogma to become electable, Mr Brown said he wanted to break free from 'old battles' between market and state, public sector and private, capital and labour.

His prime aim was to mobilise the power of the community to help the individual, but he added: 'Our aspiration now must be more than helping people to find work regardless of its quality or prospects, but ensuring full and fulfilling employment by expanding employment and training opportunities for all,' he said.

'In this way, the interests of the economy and the interests of the individuals within it are the same. If we fail one, we fail the other.'

With January's jobless figures due today, Mr Brown said he wanted Labour to abolish long- term and youth unemployment, ensuring that those out of work for a year, and those just leaving school, were offered either work or high-quality training.

But in something described by Mr Brown's office as 'a radical initiative . . . that the concept of permanent redundancy should be abolished', he spoke of the long- term aim of replacing all redundancy with 'the sure prospect of re-skilling' - so that individuals themselves did not become redundant.

Mr Brown said he was seeking something 'far in advance of the traditional definition of full employment', expressed by Sir William Beveridge in 1944 as an average unemployment rate of 3 per cent of the workforce.

But many MPs, on both sides of the Commons, will pay greater attention to the shadow Chancellor's outline sketch of macro-economic policy - a rare excursion into the field.

He said: 'In the debate between monetarism and Keynesian demand management, we know enough to eschew the notion that inflation can simply be ignored or the idea that the level of demand is not a concern of government. . .

'Let us be clear - low inflation is a necessary economic objective and demand management is a necessary economic instrument.'

Mr Brown then echoed the words of the 1944 Employment Policy White Paper, which defined full employment as 'a high and stable level of employment', saying: 'Labour demand management policies have rightly sought to maintain a high and stable level of demand compatible with the economy's capacity to produce. But the real challenge now is to increase the capacity of the economy for high levels of sustainable growth.'

Turning to the delicate balance between tax and spending policies, he said: 'The tax-spending issue should not start from a prior disposition in favour of either. We do not tax for its own sake. We do not spend for its own sake. We are not against wealth. We are against poverty and the unfair waste of individual potential.

'We tax and spend for a purpose justifiable if it increases the opportunities of individual people in our community and so augments national wealth. If we can cut tax when it is prudent to do so, or cut spending programmes where there is waste, we will. But we also recognise that if we do not invest in our country and its people and raise money so that we can invest in them, then we will all collectively and individually be less prosperous.

'These are the traditional issues, immensely important of course, and involving critical judgements and controversy. They will involve hugely difficult political choices and underlying these choices will be a battle of principles.'

But he said that those difficulties would not be allowed to get in the way of a new agenda that would ensure employment, career and training opportunities for all - something that went far beyond 'the traditional definition of full employment'.

The speech could help to answer the Prime Minister's taunt, in Commons questions on Tuesday, that he would find Labour concern about unemployment more convincing if it had 'one decent economic policy' to tackle it.

Andrew Marr, page 25

(Photograph omitted)