The Tory record on job creation was abysmal. Their solution to solving the growing number of people without work was to fiddle the figures continuously and use coercive tactics to get the unemployed off the register. There is little doubt that one of the main reasons why Labour swept to power was because no one in the country believed Tory claims of a booming economy. In fact, the official unemployment figures are more discredited among ordinary people than Norman Lamont’s effort to steady the pound on Black Wednesday was in the markets! The question in the mind of every Labour and trade union activist is whether New Labour will mean New Jobs.
Unfortunately, the first signs are not good. Gordon Brown’s decision to hand over control of monetary policy to the Bank of England, thus absolving himself of responsi-bility for setting interest rates, is an act of political cowardice. Ken Livingstone quite rightly pointed out that "it is absolutely bizarre that, having struggled to win political power for 18 years, our first action should be to hand over part of the power we have won to a central banker who has never expressed a single progressive thought. To hand power to set interest rates to the Bank of England is to insulate a key area of economic policy from democratic accountability."
Ideologically, Brown’s move is a massive victory for monetarism and orthodox economics. The idea that economics is a technical discipline that should be above the political debate is not new. Yet, until the New Labour project was set rolling these ideas had been flatly rejected by the labour movement. Jospin’s victory against all the odds in France shows that ordinary people do expect governments to create jobs. The idea that governments are powerless to do so is increasingly discredited among academics, policy makers and voters across Europe.
During the election campaign Labour promised to be the party of fair taxation. If that principle had prevailed Labour should have raised rather than lowered corporation tax. A higher top rate of income tax and an end to the National Insurance holiday enjoyed by people on incomes above the Upper Earnings Limit should have been priorities. In addition a Labour Government should not shy away from borrowing to invest. Financing public infrastructural projects through the Private Finance Initiative is like borrowing from a loan shark.
New Labour’s welfare to work programme sounds fine as a concept. Socialists want to see everyone who wants to work to be given the chance to have a job. But Labour’s plan will deal with the symptoms and not the causes of high unemployment. Millions of people in this country are desperate to get a real job — the problem is that there are not enough jobs to go around.
The key to tackling mass unemployment lies in increasing investment in public services and infrastructure. The money required to do this should be raised through progressive taxation and increased borrow-ing. Even the Commission on Social Justice (1994) correctly noted that "it is in the non-tradeable sector where job growth must come". It is not difficult for socialists to identify obvious areas of unmet social need. An increase in public sector employment is a necessary and essential step to create full employment.
The Full Employment Forum has already set out clearly costed plans on how to start the ball rolling by creating a million jobs in the first instance. There are also signs that trade unions are at odds with Blair and Brown over full employment. For example, the Scottish Trade Union Congress has published plans on how to tackle unemploy-ment in Scotland through direct government intervention. New Labour lacks the political will but we can’t let them off the hook. Campaign for full employment and make the "New Labour, New Jobs" slogan count.