Streeting suggests NI cut and North Sea drilling

Here is the latest breaking news from around the world: Streeting suggests NI cut and North Sea drilling16 minutes ago Share Save Add as preferred on GoogleDamian GrammaticasPolitical correspondentReutersFormer Health Secretary Wes Streeting has suggested cutting employers' National Insurance (NI) could be a way to incentivise businesses to hire more young people. In an interview with the Sunday Times, he also said some new North Sea drilling for oil and gas should be allowed as it would raise more tax. Since quitting the cabinet just over a fortnight ago, Streeting has been distancing himself from policies pursued by Sir Keir Starmer's government.

The former minister, who says he will challenge Sir Keir in any Labour leadership contest, has already said the UK's future lies "one day back in the European Union", and called for what he described as a "wealth tax". Now Streeting has floated the idea of a "targeted" cut to National Insurance to tackle youth joblessness. It follows the publication this week of the review by Alan Milburn into the rising number of young people not in education, employment or training, known as NEETS.

The Details

"We have to make it easier for business to employ young people and for businesses to take that risk on someone," Streeting told the Sunday Times. "I think we should be thinking actively about how to incentivise, whether that's through targeted reduction in employers' National Insurance or other kinds of recruitment and retention incentives," he said. Labour's first budget after winning the 2024 election hiked taxes with the specific aim of investing in public services.

The rate of National Insurance paid by employers was increased from 13. 8% on each employee's salary to 15%. The starting threshold it applies to was lowered from £9,100 to £5,000.

The measure aimed to raise £25 billion a year. The National Health Service, which Streeting oversaw until he quit earlier this month, was one of the principal beneficiaries. But while Streeting has floated lowering employers' NI he did not, in his remarks to the newspaper, suggest any cuts to NHS spending.

What Experts Say

During his review, Milburn said employers had told him Labour's policies of increasing NI and the minimum wage had disincentivised them from hiring young people. But, he said, the Low Pay Commission which has been monitoring the situation "has concluded that there isn't one straightforward impact" on youth employment rates from the tax and wage increases. The NEET problem was not triggered two years ago, Milburn said.

"It's been going on since time immemorial. "Sir Keir's government points out that many young people are already exempt from NI, as employers do not pay NI if their workers are under 21 years old unless that person earns more than £50,000 a year. And it says it has made it a priority of implementing the "biggest youth employment reforms in a generation" to help half a million young people find work.

The development has drawn wide international attention, with diplomatic circles watching closely.