Former Health Secretary Wes Streeting has suggested cutting employers' National Insurance (NI) as a way to encourage businesses to hire more young people, while also voicing support for new North Sea oil and gas drilling, in a bid to distance himself from Prime Minister Sir Keir Starmer's government.
In an interview with the Sunday Times, Streeting proposed a "targeted" reduction in employers' NI to tackle rising youth unemployment, following the publication of a review by Alan Milburn into the growing number of young people not in education, employment or training (NEETs).
"We have to make it easier for businesses to employ young people and for them to take that risk on someone," Streeting said. "I think we should be thinking actively about how to incentivize, whether through a targeted reduction in employers' National Insurance or other recruitment and retention incentives."
Labour's 2024 budget increased employers' NI from 13.8% to 15% on salaries above £5,000, raising £25 billion annually to fund public services, including the NHS. Streeting, who oversaw the NHS until he resigned earlier this month, did not suggest cuts to health spending.
Milburn's review noted that employers blamed Labour's NI and minimum wage hikes for discouraging youth hiring, but the Low Pay Commission found no straightforward impact on youth employment rates from those policies. The government highlighted that employers already pay no NI for workers under 21 earning under £50,000, and has introduced a £3,000 grant for each 18-to-24-year-old hired after six months on benefits.
Work and Pensions Secretary Pat McFadden responded to Streeting's NI proposal, saying: "Any tax break has to be paid for."
Streeting also broke with Starmer on North Sea drilling, backing new licenses for oil and gas fields like Jackdaw and Rosebank, which Labour's manifesto had opposed. "Yes, I think that's probably where Ed [Miliband] will get to," Streeting told the Sunday Times, adding that while drilling wouldn't lower bills, it would boost tax receipts.
Starmer's government maintains that oil and gas will continue to be extracted from the North Sea, but advocates for a transition to renewables like solar, wind, and nuclear for long-term energy security.