‘Full employment’ usually means the lowest achievable rate of unemployment — somewhere south of 5 per cent compared with 7.2 per cent today, or to put it in numbers, fewer than 1.5 million compared with 2.3 million last month. You might think it ought to be a target of every Chancellor of the Exchequer. Only Norman Lamont ever said otherwise in public, telling the House of Commons in 1991 that ‘rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying.’ Now George Osborne has embraced the full employment target, taking a little more wind out of Labour’s sails as he did so, and has said he wants us to have the highest employment rate in the G7.
Given the rate at which our supposedly moribund economy created private-sector jobs over the past three years, and the flexibility of our labour market compared with at least the European members of G7, it’s not unreasonable to think we might creep in the direction of that target if current trends continue.
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