Tories aim at 'full employment'

There are as many vacancies as unemployed, say Tories

The Conservatives have pledged themselves to the goal of full employment.

In an apparent policy u-turn, shadow chancellor Michael Portillo said full employment would be one of the key economic aims of a future Tory government.

Mr Portillo made the announcement in a speech to the Institute of Economic Affairs in place of party leader William Hague, who had to pull out with flu.

When I talk about the goal of full employment, I mean the right of the people to expect their government to create the economic conditions in which enterprise can flourish

Michael Portillo

The shadow chancellor said: "Some of you may raise an eyebrow at the Conservative leadership setting `full employment' as a goal for the economic policy of the next Conservative government.

"I know why you might be concerned," he added: "For a generation, my party's economic mission has been to reverse a legacy of disastrous demand-management policies and half-understood Keynesian fine-tuning implemented in the name of `full employment'.

"The slogan may have been `full employment' but the ultimate result was invariably longer dole queues."

Allowing enterprise to flourish

The speech would appear to be a shift from Thatcherite economic policies as it was Lady Thatcher's government which broke the post-war consensus on employment policy, preferring instead strict monetary policies and low inflation.

But giving the policy more definition Mr Portillo said: "When I talk about the goal of full employment, I mean the right of the people to expect their government to create the economic conditions in which enterprise can flourish."

Economists tend to define the term 'full employment' as the maximum number of people who can be employed without leading to inflation.

U-turns

The move sees the Conservatives' economic policy move closer to that of the government's.

It follows a series of earlier u-turns which saw Mr Portillo drop Tory opposition to the national minimum wage and giving operational independence to the Bank of England.

Reacting to Mr Portillo's speech Treasury Chief Secretary Andrew Smith said: "He should come clean about the extremist Tory plans to abolish the New Deal which has helped 200,000 young people into jobs.

"Far from achieving full employment, Mr Portillo's Tories will, as they did in 18 years of Tory rule, push unemployment upwards."