Labour MP Wes Streeting has called on Chancellor Rachel Reeves to reduce employers' National Insurance contributions. In an interview with the Sunday Times, Streeting proposed a "targeted reduction" to actively incentivise hiring. The former Health Secretary argued that such a move could boost employment and support economic growth.
Government Response
Pat McFadden, head of the Department for Work and Pensions, responded to Streeting's remarks on Sky News on Sunday, May 31. He acknowledged the debate but cautioned that any tax change carries costs and consequences. "If you want to pull one lever in the tax basket, as it were, there will be consequences," McFadden said, emphasising the need to balance fiscal priorities.
Health and Labour Market Link
Streeting also highlighted the connection between health and employment, noting that falling NHS waiting lists are a crucial labour market measure. He pointed to recent progress in reducing waiting lists as a positive step for workforce participation.
North Sea Drilling
In the same interview, Streeting expressed support for drilling in the North Sea. He predicted that Energy Secretary Ed Miliband would eventually approve new licences, stating, "I think that's probably where Ed will get to." Streeting argued that while drilling may not lower energy bills directly, it would generate higher tax receipts.
Milburn Report Warning
Streeting's comments follow the publication of the Milburn report, which warns of a potential 25% rise in young people not in work or education, reaching 1.25 million by the early 2030s. Alan Milburn, the report's author, urged urgent government action to avoid a "lost generation." He criticised the welfare state for exacerbating inactivity and argued that current systems fail to enable young people's participation in the labour market.
"This is not a failure of young people. It is a failure of a system stuck in the past," Milburn said. He called for a comprehensive overhaul of education, health, and welfare systems to prevent young people from ending up on benefits rather than in jobs.
