Streeting breaks from Starmer with tax, energy and EU rethink

Wes Streeting’s latest intervention looked less like a policy tweak than an opening move in a wider Labour split. The former health secretary set out a package of positions on tax, energy and Europe that moved him closer to the party’s growth-and-jobs pragmatists and further from Sir Keir Starmer’s current orthodoxy.

Streeting said Labour should consider issuing new North Sea oil and gas licences, but not because they would lower household bills. He argued the point was tax revenue, even as Labour’s 2024 manifesto said it would not open new fields and would instead manage existing North Sea production for its full lifespan while pursuing a clean-energy transition. He also said Britain should keep taking climate change seriously and push hard into renewable energy, but warned against trying to lead in a way that would “cut off its own nose to spite its face”.

The clearest break came on tax. Streeting suggested he would be open to reversing the increase in employers’ national insurance contributions that Rachel Reeves set out in the October 2024 Budget. That measure lifted the rate by 1.2 percentage points to 15% and was expected to raise about £25 billion a year. Streeting argued Labour should consider targeted cuts in employers’ national insurance, or other recruitment and retention incentives, to help employment, especially for young people.

He also reached beyond the government’s current line on Europe, saying Labour should stick to its manifesto commitments in the short term while backing the United Kingdom’s eventual return to the European Union. On devolution and state intervention, he went out of his way to praise Andy Burnham’s approach as “a good pro-fairness thing to do”, another signal that he is looking well beyond the Starmer camp for allies and ideas.

The intervention landed as Sir Keir Starmer was already under pressure from cabinet ministers and industry figures to rethink Labour’s opposition to new North Sea drilling, with economic concerns sharpened by the war in Iran and the broader shock to fossil-fuel markets. Tony Blair has also pressed the prime minister to relax key green commitments and expand North Sea drilling, arguing that Britain remains exposed to global energy turbulence.

Climate experts have countered that new drilling would not bring down prices or improve energy security because oil and gas are traded on international markets and the North Sea is a mature basin. That leaves Streeting’s stance as more than a policy adjustment. It is a sign that senior Labour figures are beginning to test where the party’s next argument will be fought: on growth, tax and energy, and on whether Starmer’s current settlement can hold.

Streeting has already told Starmer he would challenge him for the Labour leadership during a 16-minute meeting in Downing Street, underlining how quickly this debate could become a real contest for the party’s future direction.