Wes Streeting has backed calls for national insurance cuts for businesses, and for the government to drill for oil and gas in the North Sea.

The former health secretary and potential Labour leadership candidate told the Sunday Times there should be a “targeted reduction” of employers’ national insurance contribution as a way to “actively incentivise” hiring, particularly of young people.

A report this week by the former cabinet minister Alan Milburn said a lack of hospitality jobs was contributing to high youth unemployment in Britain. It pointed to a halving of vacancies in the hospitality industry over the past four years alone. Analysis shows Britain has the third-highest rate of 16- to 24-year-olds who are not earning or learning among rich European countries.

In 2024, the rate of national insurance paid by employers was increased from 13.8% on each employee’s salary to 15%. The starting threshold it applied to was lowered from £9,100 to £5,000. The measure aimed to raise £25bn a year, but businesses said it disincentivised hiring lower-paid and part-time staff.

Pat McFadden, the work and pensions secretary, suggested he disagreed with this view.

Speaking on Sky News on Sunday morning, he defended the government’s record, saying that businesses already did not have to pay employers’ national insurance for workers under 21.

He said: “Now, it’s a fair point of debate to say maybe we should expand that or do something with it, but like every other call for a tax change, there’s a cost to these things. You have to net these things off.”

He added: “If you want to pull one lever in the tax basket, as it were, there will be consequences.”

McFadden claimed the increased national insurance rates had contributed to falling NHS waiting lists. He said: “We have seen NHS waiting lists fall. This is important because falling waiting lists are a labour market measure too.”

There has been a debate within Labour about whether to grant drilling consents for the giant oil and gas fields Rosebank and Jackdaw. Though there was a commitment not to give out any more licences for fossil fuels in Labour’s manifesto, there is a loophole that could be exploited; Rosebank and Jackdaw were given exploration licences by the previous Conservative government. They just need consent to drill.

Ed Miliband, the energy secretary, is due to make a decision on these oil and gas fields in coming weeks. He, along with the North Sea Transition Authority, have to decide whether the drilling would be consistent with the UK’s climate commitments.

Streeting said: “Yes. I think that’s probably where Ed will get to. When he makes a decision, I’d be surprised if that wasn’t the case”.

“The granting of those licences will not necessarily translate into cheaper bills, but it will translate into higher tax receipts,” he added.

Streeting has openly stated he wishes Keir Starmer to resign, and that he wants to stand in a leadership contest. The current frontrunner of any hypothetical contest is Andy Burnham, Manchester’s mayor, who is hoping to get back into parliament so he can stand for leader. He is Labour’s candidate in the Makerfield byelection, which will be held on 18 June.