Wes Streeting Suggests National Insurance Cut and North Sea Drilling for Tax Revenue
Former Health Secretary Wes Streeting has proposed a "targeted" reduction in employers' National Insurance (NI) contributions as a mechanism to stimulate businesses to hire more young people. In an interview, Streeting also advocated for permitting some new North Sea oil and gas extraction, arguing it would generate additional tax revenue for the Exchequer.
These pronouncements follow Streeting's recent departure from the cabinet and his declared intention to contest Sir Keir Starmer's leadership within the Labour party. He has previously voiced support for the UK's eventual return to the European Union and called for a "wealth tax."
Youth Employment and National Insurance
Streeting's suggestion for an NI cut addresses the issue of rising youth joblessness, or those not in education, employment, or training (NEETs). This follows the publication of Alan Milburn's review, which highlighted employer concerns that the government's increase in NI and the minimum wage had disincentivised hiring younger workers.
The current government's first budget, post-2024 election, raised employers' NI from 13.8% to 15% on each employee's salary, lowering the starting threshold from £9,100 to £5,000. This measure was intended to raise £25 billion annually, with the National Health Service being a primary beneficiary. Streeting, however, did not link his NI proposals to any reductions in NHS spending. The Low Pay Commission has, however, indicated that there is no straightforward correlation between recent tax and wage increases and youth employment rates.
The government maintains that many young people are already exempt from NI, as employers are not liable for NI on workers under 21 unless their earnings exceed £50,000 annually. New measures, such as "youth jobs grants," offer £3,000 to employers for hiring 18 to 24-year-olds who have claimed benefits for at least six months.
North Sea Drilling Policy
Streeting has also diverged from the government's stance on North Sea oil and gas. While Labour's 2024 manifesto explicitly ruled out new exploration licences, citing concerns over energy security, bill reduction, and climate impact, Streeting indicated support for approving existing applications. He stated, "The granting of those licences will not necessarily translate into cheaper bills, but it will translate into higher tax receipts."
Energy Secretary Ed Miliband is reportedly considering licence applications for two fields, Jackdaw and Rosebank, which were submitted before Labour took office. Conservative and Reform UK parties have pressured the government to approve more drilling, arguing against neglecting domestic resources amidst elevated energy prices exacerbated by the Iran war. Sir Keir Starmer's position remains that future energy security relies on a transition to renewable sources, supported by nuclear power.
