Wes Streeting Suggests National Insurance Cut and North Sea Drilling to Boost UK Economy
Wes Streeting, who recently departed the cabinet, has put forward proposals that signal a divergence from current government economic policy. In an interview, Mr Streeting advocated for a 'targeted' cut to employers' National Insurance (NI) contributions as a mechanism to incentivise businesses to employ more young people.
Addressing Youth Unemployment
This proposal follows the publication of Alan Milburn's review into the increasing number of young people categorised as 'not in education, employment or training' (NEETs). Mr Streeting stated that making it easier for businesses to take on young individuals, potentially through NI reductions or other recruitment incentives, is crucial.
The government's first budget, enacted after the 2024 general election, notably increased employers' National Insurance from 13.8% to 15%, lowering the starting threshold to £5,000. This measure was intended to generate £25 billion annually, with significant allocations to public services, including the National Health Service.
While Mr Streeting has suggested lowering employers' NI, he has not indicated any corresponding cuts to NHS spending. The Milburn review noted that some employers believed the increases in NI and the minimum wage had disincentivised hiring younger workers, though the Low Pay Commission has concluded there is no singular impact on youth employment rates from these changes.
The current government highlights existing NI exemptions for workers under 21 years old earning below £50,000 annually. It also points to new initiatives, such as 'youth jobs grants' offering £3,000 to employers for hiring 18-to-24-year-olds who have been claiming benefits for over six months, as part of its 'biggest youth employment reforms in a generation'.
North Sea Oil and Gas Expansion
Furthermore, Mr Streeting has also differentiated his stance on new North Sea oil and gas drilling. The current government's 2024 manifesto explicitly stated it would not issue new exploration licences, arguing they would not reduce energy bills, enhance energy security, or mitigate the climate crisis.
However, Mr Streeting indicated his support for approving new licences, suggesting it would primarily lead to higher tax receipts rather than necessarily cheaper bills. The Energy Secretary, Ed Miliband, is reportedly considering applications for two fields, Jackdaw and Rosebank, which were submitted prior to the current administration taking office.
The government maintains that oil and gas extraction will continue from the North Sea regardless of these new licences. Its stated long-term strategy for energy security and affordability involves a transition towards renewable sources, including solar and wind power, supported by nuclear generation.
