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Wes Streeting, the former Health Secretary, has proposed that reducing employers’ National Insurance contributions might encourage businesses to hire more young workers. In a recent interview with the Sunday Times, he suggested a “targeted” cut as a way to address youth unemployment, emphasizing the need to make it easier for companies to take on young people and shoulder the associated risks. This comes amid a review by Alan Milburn highlighting the increasing number of young individuals not engaged in education, employment, or training (NEETs).
Since his departure from the cabinet a little over two weeks ago, Streeting has been steadily distancing himself from the current Labour government led by Sir Keir Starmer. He has openly stated his intention to challenge Starmer for Labour leadership and has expressed views including the UK’s eventual return to the European Union and the introduction of a wealth tax. Now, he has added his voice to debates about labour market policies by suggesting that an incentive such as reducing employers’ National Insurance, or other recruitment and retention benefits, might stimulate youth job growth.
Labour’s recent budget, passed after their 2024 election victory, raised taxes to fund public services, notably increasing revenue by around £25 billion annually. The National Health Service, which Streeting previously oversaw before stepping down, benefited significantly from this funding. Although Streeting is advocating for a possible reduction in employers’ National Insurance payments to boost youth employment, he made clear that he does not support cuts to NHS funding.
The review by Milburn also notes that employers have reported Labour’s policies on raising National Insurance and the minimum wage may discourage them from taking on young workers. Yet, the Low Pay Commission, charged with monitoring these changes, concluded that the impact on youth employment rates is not straightforward. The issue of NEETs, Milburn pointed out, is a long-standing problem predating recent policy shifts. Meanwhile, the Labour government highlights that many young employees are already exempt from National Insurance contributions if under 21 and earning below a certain threshold. Additionally, the government has committed to implementing the “biggest youth employment reforms in a generation,” including offering £3,000 grants to employers who hire young people aged 18 to 24 who have been on benefits for six months or longer.
On the topic of North Sea oil and gas drilling, Streeting has distanced his stance from the official Labour party line. While the 2024 Labour manifesto pledged not to issue new licenses for exploration, arguing these would neither reduce bills nor enhance energy security, Streeting indicated that some new drilling should be permitted. He referenced ongoing evaluations by the Energy Secretary Ed Miliband regarding licenses for projects like Jackdaw and Rosebank, which were applied for before the Labour government took office. Streeting expressed support for approving such licenses, suggesting the decision would increase tax revenues even if it does not lead to cheaper energy bills.
Sir Keir Starmer’s position remains that oil and gas extraction will continue regardless of new licenses, but stresses that the future lies in transitioning to renewables such as solar and wind, supported by nuclear energy, to achieve more affordable and secure energy supplies in the long term
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