Any other business

On Jim O’Neill, the new ‘Northern Powerhouse’ supremo

Plus: whether oil prices are set to soar once more; and Red Len is at it again, working busily against Labour’s interests

23 May 2015

9:00 AM

23 May 2015

9:00 AM

A doff of my flat cap to Jim O’Neill, the former Goldman Sachs economist who has been made a peer, a Treasury minister and George Osborne’s ‘Northern Powerhouse’ supremo. The metro-politan media is busy trying to find reasons why this project for improved links between northern cities plus elements of devolution is a bad idea, or has ulterior motives behind it. The Guardian, for example, reports that ‘critics of’ Manchester’s Labour leader Sir Richard Leese think he has been ‘lured’ into championing Osborne’s plan ‘by the prospect of a bigger empire’; and that while Leese and his chief executive Sir Howard Bernstein have pulled off ‘breathtaking property deals’ (there’s a damning phrase for you), that doesn’t qualify them, or whoever Greater Manchester’s first elected ‘metro mayor’ turns out to be, to run the £6 billion worth of NHS services that will come their way as part of a package infelicitously labelled ‘Devo Manc’.

The powerhouse, if seriously driven forward, will be a bold undertaking in all its aspects — worth pursuing if for no other motive than to adjust the imbalance that saw 12 net additional jobs created in cities in the south of England for every one created in cities elsewhere in the country between 2004 and 2013. It has the potential to do far more for prosperity and social harmony than a north-south high-speed rail line, at far less cost. But O’Neill’s real challenge, apart from finding a way to compress the expected decade-long planning fight for faster trains from Liverpool to Hull via Manchester and Leeds, will be to persuade those cities (plus Sheffield and York) to work wholeheartedly with each other.

Greater Manchester already provides a model, as a cohesive grouping of two cities and ten metropolitan boroughs; among other collaborations, these local authorities are joint shareholders in Manchester Airport, the powerhouse’s international gateway. But history and Pennine geography will impede wider co-operation even if journey times shrink. Speaking to a Yorkshire dinner last week, I was heckled (in a genteel way, and only by the ladies) when I said the powerhouse would clearly have to be driven from Manchester rather than Leeds. Salford-born multimillionaire O’Neill might begin by transferring his allegiance from Manchester United — where he has already given up his season ticket, his Red Knights consortium having failed to wrestle control from the Glazer family — to Leeds United, which has been through such turmoil that Wikipedia carries an entry for ‘Doing a Leeds’, defined as ‘potential dire consequences … of financial mismanagement’.

Not that I’m being disloyal to my own county. I also think O’Neill should appoint an eloquent Yorkshire-born deputy, and I don’t mean a has-been politico — put your hand down, Lord Prescott — but a powerhouse poet laureate to complement O’Neill’s technocratic role. If Huddersfield’s Simon Armitage isn’t available, my hat’s in the ring.

Unpredictable oil

In Spectator Money, enclosed with this issue, Matthew Lynn and Robin Andrews argue that there are long-term gains to be made by informed picking of energy stocks, despite the oil-price decline. But news items even since our supplement went to press a few days ago underline the changing pattern of global supply and demand that makes this such an unpredictable sector. On the supply side, at least $100 billion worth of new oil and gas investment has been stalled since prices plunged — including most of the Alberta oil sands development that Canadians once thought would make them golden sheikhs — and Goldman Sachs has identified a longer list of projects at risk, equivalent to more than 10 per cent of global demand.

Meanwhile, Saudi exports to the US have dipped below a million barrels per day as North American production, much of it from shale, has increased. With so many new projects mothballed, however, demand focus must eventually return to the turbulent Middle East, and ‘peak oil’ advocates still see oil prices one day rising far beyond previous highs. But that’s not what’s behind the recent rally from $45 a barrel to $65: the FT explains that it’s due to massive buying of oil futures by investment funds, for speculation or as a hedge against currency and bond positions. Real-world fundamentals still point one way: ‘It’s more likely that the Brent price could fall back into the mid-$50 range than that it will continue to rise toward $70 per barrel,’ said on Monday.

Agent Len at it again

You remember my theory that Unite leader ‘Red Len’ McCluskey is ‘the Conservative party’s best agent’? This is the man who as a young union official in Liverpool boosted support for Margaret Thatcher by backing Derek Hatton’s loony-left council; who instigated the British Airways strike that tainted Labour’s prospects ahead of the 2010 election; who when the coalition was in low water in 2012 reminded the nation what the alternative might have been by declaring the London Olympics a ‘legitimate target’ for protest against public-sector cuts; and whose Unite team brought hubris on Scottish Labour in 2013 by trying to shoehorn their preferred candidate into Falkirk — which went SNP with a majority of almost 20,000.

Having anointed Ed Miliband with a huge Unite vote in 2010, Len must have felt there was little more he needed to do to help his secret Tory minders to victory; he certainly kept quiet during the campaign. But now he’s offering a new masterclass in subversion by praising Andy Burnham’s candidacy to follow Miliband and hinting (though of course also denying) that he might take Unite’s millions away from Labour if the ‘correct leader’ does not emerge. Burnham might as well have ‘Len’s Man’ tattooed on his forehead, because if he wins, that’s how David Cameron will address him at PMQs week after week. As for Len himself, surely an earldom awaits.

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  • Fried Ch’i

    Have you asked anyone in Manc about NHS regional devolution? What do the people think this is about other than cautious relabelling of the status quo?

    • dalai guevara

      They are utterly unaware, until the healthcare service provision will leapfrog to ever higher levels once more.

  • AndyB

    I loved Jim Murphy’s parting shot that described Len McCluskey as a man who would back the wrong horse in a ‘one-horse’ race. Keep up the good work, Len.

  • nana

    lets hope he does’nt forget there are 9 other councils involved in this.not gone down well that we ‘would’ be having a mayor in the first place.will he stop councils from spending on ‘legacy’ projects.

  • Blindsideflanker

    Not content with screwing up nations finances, Goldman Sachs employees are now rewriting/screwing nations constitutions.

    Most merchant banks make it their business to churn and burn corporations, taking a big cut in financing take overs, then when their bloated corporation hasn’t returned shareholder value, taking a big cut in the their break up. Goldman Sachs makes it their business to churn and burn countries, with a Common Purpose agenda behind it. Remember Sutherland went from EU Commissioner to Goldman Sachs Chairman, to UN Migration Commissioner calling for mass immigration to be used as a weapon to break up the cohesion of countries.

    • jim

      You said it brother…and all of it signed off by the 1960’s70’s generation of student maoists who are now running the EU.It’s so much worse than we thought it would be.Right and left have made a pact against the citizenry.

    • dalai guevara

      ‘Breaking up countries’, as you so eloquently suggest, would serve what purpose?

      • Blindsideflanker

        A state that has lost its identity , that no longer has a demos, is very much easier to exploit , no longer do you have some plebs thinking they have an ownership to the place annoyingly stalling money making schemes.

        • dalai guevara

          A state with an identity, with a demos, is much easier to exploit. Dumbest football hooliganism and before that a couple of world wars prove my point. What offer you, dear friend?

          • Fried Ch’i

            Nothing, of course.
            The etymology of the word hooligan suggests it originated in Ireland. What a lovely f e * k i n surprise…

  • Blindsideflanker

    “The powerhouse, if seriously driven forward, will be a bold undertaking in all its aspects ”

    It will be the balkanisation of England, with West Lothian Questions scattered around England, where some people get representation via Mayoral fiefdoms, while others who don’t live in cities living in a representational wasteland.

    Twice English people have voted to reject their balkanisation, it seems the third time they aren’t going to be asked , but have it foisted on them regardless.

    The whole concept of Mayoral fiefdoms goes against English civic governance , where everybody got representation via their Parishes, their Councils, and their counties.

  • global city

    Being ran by Manchester/Brussels will make little difference to the current Whitehall/Brussels arrangement.

  • AQ42

    “I also think O’Neill should appoint an eloquent Yorkshire-born deputy, and I don’t mean a has-been politico — put your hand down, Lord Prescott”

    When did they move Prestatyn to Yorkshire?

  • HaHaMrWilson

    A northern powerhouse will just be another place for a metropolitan bourgeoisie to inhabit a world of fantasy.
    1% will benefit.