It may seem odd, but the idea of full employment has so disappeared from the political vocabulary that today the phrase is never heard. Yet in the post war period no political party could expect to win an election without full employment as a declared policy objective. What happened?
Full employment was generally achieved until the early nineteen seventies, when increasing lack of competitiveness and the rise of the formerly vanquished Germany (split West and East) and Japan, began to erode Britain’s industrial strength. At the heart of the decline was trade union indiscipline with millions of working days lost every year through strikes. Money which should have been used to modernise and upgrade industrial processes went instead on unsustainable wage settlements. Inflation became exotic. Finally the IMF had to bail the country out. The union response was the winter of discontent. Along came Thatcher and took on the unions. The militants declared war. The Lady would not yield. With unemployment hovering at three million, hitherto a sure fire ticket to political oblivion, she won not one but two electoral landslides.
Full employment was a dead duck politically. Nobody dared speak of it again. None speak of it now. Yet it is the key to a fully functioning, vibrant and growing economy. It is the greatest route to universally shared prosperity and social advancement. Unfortunately today we are obsessed by growth as an idea, but without any clear vision of where it comes from. Indeed all recent growth has come from borrowing to spend or invest, thus inflating assets without creating any new wealth. Wealth creation in the economy has shrunk. Benefit costs have risen to undreamed of levels, the gap between rich and poor grows ever wider, social exclusion, poor educational achievement, ghetto slums (once bright new estates offering a better life than the slums of the bed old days), child poverty, generations of workless and work shy, low skill service jobs leading nowhere, all these bad and terrible things stem from the fact that we are happy with the idea of two million people plus are unemployed even in good times, while millions more work at jobs which sap the economy, rather than build it.
There has to be a fundamental rethink. At the heart must be the necessity of full employment. In return the unions must stop treating grievances as opportunities for industrial action. Full employment cannot be achieved without massive industrial regeneration and infrastructure renewal. All of that will depend on competitive costing. But, as our foreign owned car industry proves, GB can do it. If the politicians could start to think it through, it would utterly transform the future for all. It cannot be achieved by the private sector alone, nor will a command economy achieve it. Full employment depends on partnership at every level, so that each part does what it can do best, to enable the other parts to do even better.
We have seen the ideas of partnership and pulling together work spectacularly at the Olympics. The politicians and the country need to take inspiration from their sporting heroes and move up a gear. Anything is possible if you put your mind to it. It was only a few years ago that a couple of Golds for GB at the Olympics was thought to be pretty good. Well, no longer.