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Tories Back Full Employment - But Have No Idea How to Get There

01/04/2014 13:11 BST | Updated 31/05/2014 10:59 BST

Chancellor George Osborne has committed the Tory party to full employment - but his path is beset by poor reasoning and ideological dead ends.

Stepping on to ground already occupied by Labour - which launched its own full employment commitment a year ago - Osborne cited his opponents' plan for a jobs guarantee as an example of a policy that is "doomed to fail".

He did not offer any worked up alternative beyond "backing business ... cutting the tax on jobs and reforming welfare."

The last of these falls into the same dishonest category as many of the Conservatives' other utterances on benefits.

The 'reform' of welfare - by which they mean cutting its value and availability - has nothing to do with recent falls in the number of unemployed people, and can play no legitimate role in achieving full employment.

The suggestion that it does is based on the idea that there are huge numbers of jobless people who are dodging work due to their low morals, a nonsense that the Tories have offered no evidence for even as they have promoted it.

What is clear is that the figures disprove the idea immediately.

There are still more than 2.3million unemployed people in the UK, and just over 500,000 job vacancies at any one time.

With around four-and-a-half people chasing every job, there is simply no way the economy in its continuing doldrums can provide enough work for all those who need it.

The Labour commitment to a jobs guarantee is backed up by a financial commitment, using a levy on bankers' bonuses to pay for it, even if some of the 'tougher than the Tories' language around it is unnecessary and demotivating to the unemployed.

Osborne does not believe in spending money directly to achieve progressive social aims, so his plan to promote jobs involves letting businesses hold on to more revenue and hoping they decide to spend some of it on employing people.

This is unlikely; the same principle saw interest rates being held at their lowest level for hundreds of years and business taxes cut over the course of the current parliament, and companies responded primarily by increasing the pile of cash they were sitting on - to more than £440 billion according to one estimate - as well as increasing pay at the top.

The differential between pay at the top and bottom has been rising for years, up 5% since 2000 according to the TUC and increasing further during the recession.

This economic illiteracy sees the government legislate on the basis that making the rich even richer incentivises them to work harder, while the poor need to be threatened with destitution to achieve the same result.

Osborne neatly captured his devotion to 1980's-style Thatcherism in his announcement, saying his policies were: "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".

In other words, outdated, outmoded and morally wrong differentiation between the 'good' - companies and workers - and the 'bad' - the unemployed.

But regular workers haven't had the same consideration as those at the top or the firms they run. Despite the cash pile held by firms (more than six in ten of them hold reserves) they have not seen their pay keeping up with inflation for many years, leading to a loss of £1,600 per worker on average over this parliament.

As many as one-in-six don't benefit from the much-trumpeted rise in the tax threshold to £10,000 because they are paid less than this, something that doesn't appeared to have occurred to our millionaire Chancellor as he promotes it as a solution to the problem of low earnings.

Of course, no millionaire has been excluded from his top rate tax cut, and no company excluded from successive corporation tax cuts.

Osborne's idea of full employment is clear: shifting people from poverty-level benefits to poverty level work, with no consideration given to implementing liveable incomes for either.

This devotion to support for the rich rather than the poor, and the decision to prioritise their interests at the expense of those lower down, is unlikely to bring the jobs he desires the in-work prosperity so needed by the majority.