A SENIOR minister has warned of “consequences” for public spending if National Insurance is cut, after leadership hopeful Wes Streeting suggested reducing employers’ contributions to boost employment.

Mr Streeting proposed a “targeted reduction” in a Sunday Times interview to “actively incentivise” hiring, particularly of young people.

Labour’s last Budget increased employers’ contributions, which opponents and some businesses say made hiring harder.

Work and Pensions Secretary Pat McFadden backed Chancellor Rachel Reeves’s original decision, saying: “If you want to pull one lever in the tax basket, there will be consequences.”

The debate comes as Labour figures jostle for position ahead of a leadership contest expected in the coming months.

Mr Streeting has declared himself a contender, saying he has sufficient backing from MPs.

Greater Manchester Mayor Andy Burnham is also expected to stand, provided he wins the Makerfield by-election on June 18.

Mr McFadden insisted there was currently “no contest,” with Sir Keir Starmer remaining in office.