Wes Streeting, the former health secretary and a prominent contender for the Labour leadership, has declared his intention to see Keir Starmer step down, positioning himself as a potential successor. In a bold interview with the Sunday Times, Streeting promoted a series of economic reforms, including significant cuts to national insurance for businesses and a push for new oil and gas drilling in the North Sea.
National Insurance Cuts on the Table
Streeting advocates for a “targeted reduction” in employers’ national insurance contributions, arguing that such a move could stimulate hiring, particularly among younger workers. Highlighting the pressing issue of youth unemployment—currently one of the highest in Europe—he pointed to a recent report by former cabinet minister Alan Milburn, which revealed a stark decline in hospitality job vacancies over the last four years.
“The current landscape is untenable for young job seekers,” Streeting asserted. “We need to incentivise companies to take on young talent by easing the financial burden of national insurance.”
In 2024, the national insurance rate for employers was raised from 13.8% to 15%, while the threshold for contributions was slashed from £9,100 to £5,000. This increase aimed to generate an additional £25 billion annually, but critics have argued it discourages firms from hiring lower-paid and part-time workers.
Government Response: A Mixed Bag
Pat McFadden, the Secretary of State for Work and Pensions, has voiced a contrasting perspective. In a recent Sky News appearance, he defended the government’s approach, highlighting existing exemptions for employers hiring workers under 21. “It’s reasonable to discuss potential adjustments, but tax changes come with their own costs,” McFadden cautioned.
He further claimed that the increased national insurance rates have been instrumental in reducing NHS waiting lists—an essential indicator of the labour market’s health. “Falling waiting lists reflect a more efficient health service and a better environment for job creation,” he noted.
Drilling Debate: A Tenuous Position
Streeting’s bid for leadership also includes a controversial stance on fossil fuel extraction. With Labour’s manifesto promising no new licences for fossil fuels, the party faces a dilemma regarding the Rosebank and Jackdaw oil and gas fields. These fields were granted exploration licences by the previous Conservative government and now require consent for drilling.
Energy Secretary Ed Miliband is expected to make a crucial decision in the coming weeks regarding these fields. Streeting expressed confidence that Miliband would ultimately approve drilling, suggesting that while it may not lower energy bills, it could enhance tax revenues.
“The granting of those licences will not necessarily translate into cheaper bills, but it will translate into higher tax receipts,” he explained, advocating for a pragmatic approach to energy policy.
Leadership Contest Looms
In the midst of these discussions, Streeting has made no secret of his desire for a leadership contest, openly calling for Starmer’s resignation. As the political landscape shifts, many are eyeing Manchester Mayor Andy Burnham as a potential frontrunner should a contest arise, with Burnham currently seeking to return to Parliament in the upcoming Makerfield byelection on 18 June.
Why it Matters
Streeting’s proposals highlight a significant crossroads for the Labour Party as it grapples with economic challenges and climate commitments. His calls for national insurance reform and renewed fossil fuel exploration reflect a broader debate within the party about balancing immediate economic needs against long-term environmental goals. As the leadership race heats up, these issues will undoubtedly shape Labour’s future direction and its appeal to a diverse electorate.