Financial News

  • 1 April 2014, 14:05

Osborne Pledges 'Full Employment' For UK

George Osborne has set an ambitious new goal of "full employment" for Britain.

The Chancellor defined his commitment as making the country the "best place in the world to create a job, to get a job" and the place with the "highest employment rate of the world's largest economies".

Mr Osborne made the pledge - which does not mean reducing the rate of unemployment to zero but simply to keeping it low - during a speech in Essex. The current unemployment rate is 7.2% and the UK has the fourth highest employment rate of the G7 countries.

During the speech he hailed the introduction of tax cuts he said were the biggest in a generation. 

The measures include the rise in the income tax personal allowance to £10,000, which comes into effect on Sunday, along with the employment allowance, which cuts employers' National Insurance contributions by up to £2,000.

On Tuesday, the corporation tax rate will be cut by 1% to 21% and reforms to business rates will be introduced. The annual investment allowance for firms will be doubled to £500,000.

Mr Osborne also hinted that the Tories would be including plans to reduce the number of people paying inheritance tax, saying it should be a "tax for rich people" in the party's election manifesto.

His comments echo those made by the Prime Minister last week when he said that he had not been able to raise the inheritance tax threshold to £1m as he had promised when in opposition because of Lib Dem disagreement.

Mr Osborne's claims on increasing the personal tax allowance measure again drew anger from Nick Clegg, whose party included the policy in its 2010 election manifesto.

He accused the Conservatives of being "tax magpies" who had stole measures the Liberal Democrats had suggested.

He said: "I think a tax magpie is someone in a political party who sort of hops from one tax proposal to the next and then seeks to claim that other people's ideas are their own, and I'm really, really proud of the fact that it's Liberal Democrats who, far from jumping arbitrarily from one tax policy to the next, have always advocated one tax policy."

The Chancellor also highlighted the introduction of a tough new welfare regime from next week "imposing more conditions on those claiming the dole".

He said it was "no good creating jobs - if we're also paying people to stay on welfare".

Mr Osborne said: "We inherited a welfare system that didn't work. There was not enough help for those looking for a job - people were just parked on benefits.

"Frankly, there was not enough pressure to get a job - some people could just sign on and get almost as much money staying at home as going out to work.

"That's not fair to them - because they get trapped in poverty and their aspirations are squashed.

"It's certainly not fair to taxpayers like you, who get up, go out to work, pay your taxes and pay for those benefits."

Shadow chief treasury secretary Chris Leslie said: "Full employment is the right aspiration but George Osborne has announced no new policies today to help people into work.

"While he has been Chancellor the number of young people stuck on the dole for more than 12 months has almost doubled and the number of people who want to work full-time but have had to take part-time jobs is at record levels."

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