What does full employment look like?

Anna Scott

This week, as cuts to corporation tax and business rates and caps to benefits came into force, the chancellor made a commitment for full employment in Britain. George Osborne wants the country to have the highest rate of employment among the G7 nations.

Explaining that Britain is creating jobs faster than at any other point in recent history, Osborne said that he wasn’t seeking to “guarantee” a job for everyone, as previous governments have, but create an environment in which Britain is “the best place in the world to create a job, get a job, keep and job and to be helped to look for another job if you lose one”.

Another Tory Chancellor – Norman Lamont – famously said in 1991 that unemployment was a price worth paying to keep inflation down. Osborne’s speech can be seen as a direct move away from that. But he didn’t actually spell out what proportion of the working age population would need to be in work for Britain to have full employment, nor did he announce any new policies to achieve it.

Meanwhile, a survey of 200 financial directors by recruiter Robert Half has found that 84% believe the UK has entered a two-speed jobs market in which competition for highly skilled specialist occupations is outpacing the general employment market. The research also found that the majority of CFOs would increase headcount in their organisations if they had the budget.

We’ve known for some months that the jobs market is recovering and economic confidence is increasing. The three main political parties are beginning to set out their stalls on employment policy as the General Election looms just over a year away.

But away from Westminster many companies are struggling to find the budgets to hire the employees they need to help grow their business. Whether the Coalition government’s tax cuts will enable businesses to grow enough to take on more skilled staff may become more clear in the coming 12 months, but the chancellor’s vision – particularly for young people – seems a long way off just yet.