Treasury’s devolution minister resigns from government

23 Sep 16

Treasury minister Lord Jim O’Neill, who led the department’s work on devolution deals including the Northern Powerhouse, has resigned, becoming the first person to quit Theresa May’s government.

O’Neill, who led the City Growth Commission before entering government, was responsible for city devolution, including Northern Powerhouse, since being given the role last year.

In its report last year, the City Growth Commission called for better connectivity in the north of England to boost the agglomeration benefits of the cities in the region, a project O’Neill dubbed ManSheffLeedsPool. Deals are in place in Greater Manchester, Sheffield, Birmingham and Liverpool and the Tees Valley, although a deal for the North East Combined Authority has been rejected by four of the seven councils.

However, it had been reported that O’Neill, a former chair of Goldman Sachs Asset Management who also famously coined the term BRICS to describe major emerging economies, was concerned about the direction of government policy towards China. This came after the government announced a review of the Hinkley Point C nuclear power station project, which includes Chinese investment, although the scheme was subsequently confirmed.

Responding to the announcement, Local Government Information Unit chief executive Jonathan Carr-West highlighted that O’Neill’s resignation letter states that the Northern Powerhouse “appears” to be commanding the Prime Minister’s personal attention “despite speculation to the contrary”.

However, his departure from government and decision to sit as a crossbench peer is unlikely to dampen speculation that the scheme is no longer a priority, he said.

Although many will interpret this as another nail in the coffin of the Osborne legacy, Carr-West said it would be a tragedy if the devolution agenda fell foul of political point scoring.

“We need to return power to our great cities and county regions in order to grow sustainable economies, deliver effective public services and give ordinary citizens a stake and a say in the future of their communities,” he added.

“That’s much bigger than one man’s political project. Indeed it should go beyond party politics. We should all hope that Lord O’Neill is right and that this agenda remains in safe and committed hands.”

However, Localis chief executive Liam Booth-Smith cautioned against over interpretation. “Government has still made all the right noises about devolution, and Theresa May personally has committed to seeing the devolution agenda through,” he said.

“Whilst it’s a shame to lose someone so committed to devolution, it provides an opportunity for the government to refresh its approach and send the message that it remains committed to devolving power and ensuring economic growth benefits communities across the UK.”

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