George Osborne commits to ‘fight for full employment’

George Osborne on a construction site
George Osborne on a construction site ahead of his speech in Essex

George Osborne has committed the Conservatives to targeting “full employment”, saying that tax and welfare changes would help achieve it.

The chancellor said “unemployment is never a price worth paying, but artificial jobs paid for with borrowed money doesn’t work either”.

The Conservatives broke with the post-war consensus on seeking full employment during the Thatcher years.

Labour has its own “jobs guarantee” and targets full employment as a goal.

In his speech in Essex, the chancellor said governments which tried to guarantee people a job were “doomed to fail” – as they ended up increasing spending to unsustainable levels, resulting in taxes going up and jobs being lost.

‘Best place to create a job’

“You can’t abolish boom and bust,” he said. “There are always going to be ups and downs to the economic cycle.”

However, he insisted that “mass unemployment was not a price worth paying” and he was committed to securing the “fullest” possible level of employment by helping business to create new jobs and cutting taxes.

“That’s why today I’m making a new commitment – a commitment to fight for full employment in Britain.”

He said there was “no reason why Britain shouldn’t aim to have the highest employment rate of any of the world’s leading economies”.

“To have more people working than any of the other countries in the G7 group. That’s my ambition.

“The 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.”

“A modern approach to full employment means backing business. It means cutting the tax on jobs and reforming welfare.”

Tax changes

Mr Osborne said cuts to personal and business taxes this week were the “largest for two decades”.

The rise in the personal tax allowance from £6,500 to £10,000 since May 2010, enabled people to keep £700 more of their income, describing it as a “big moment” in the history of the UK tax system.

“These are the biggest cuts to personal and business taxes for two decades… this week you will keep more of the money you earn.

“This week your business can keep more of the money it makes, so you can invest, expand and create new jobs.”

Mr Osborne said the government was also capping rises in benefits and obliging people to look for work for a week before getting unemployment benefit to tackle a “deeply entrenched benefits culture” in parts of the UK.

The government, he added, was “backing businesses by cutting their taxes so they can create jobs, cutting the tax on hard-working people so their job pays, and holding back welfare rises and imposing more conditions on those claiming the dole, so that getting a job pays more”.

‘Taxes up’

In the Budget earlier this month, Mr Osborne froze fuel duty until next year, reduced duty on beer and promised a tax-free childcare subsidy of up to £2,000 if the Conservatives win the next election.

But shadow treasury chief secretary Chris Leslie said working people were facing a “cost of living crisis” and that the chancellor was “giving with one hand but taking away much more with the other”.

“While millionaires have been given a huge tax cut, millions of hard-working people have seen their taxes go up.

“There have been 24 Tory tax rises, including the VAT hike which has cost families with children an average of £1,350 over the last three years.

“Labour would deal with the cost-of-living crisis by freezing energy bills, cutting business rates for small firms and expanding free childcare for working parents.”