Features

Osborne’s false prophet: why Jim O’Neill will never deliver a ‘northern powerhouse’

The economist entrusted with reviving the North is a Goldman Sachs B-teamer who spouts airline-lounge nonsense

4 July 2015

9:00 AM

4 July 2015

9:00 AM

For the final three years of his 18-year career at Goldman Sachs, Jim O’Neill, the Treasury’s new commercial secretary with responsibility for developing the Northern Powerhouse, served as chairman of Goldman Sachs Asset Management, the company’s least-regarded and most bothersome unit. While two younger executives ran the business, O’Neill was dispatched to faraway conferences to bore audiences of docile suits with his views on whether Nigeria or Malaysia offered a better investment opportunity. When finally in early 2013 he resigned his sinecure, he was not replaced and his title was mothballed.

Since then, he has been all but marching up and down Whitehall wearing a sandwich board pleading for a government job. He chaired an inquiry into the need for anti-microbial drugs, and then another proposing greater devolution of powers to cities. As a Mancunian who has spent most of his adult life living in Surrey and working in the City, he claims now to want to rebalance Britain’s economy away from London and is working for the Treasury free of charge.

There has been plenty of criticism in recent years of the flow of senior figures from Goldman Sachs into the public sectors of the United States and Europe as well as in Britain. The current Governor of the Bank of England, Mark Carney, and head of the ECB, Mario Draghi, both spent time at Goldman, and the bank’s alumni have spread through the US Treasury like bindweed. Politicians are willing to take the risk of seeming in hock to the banking industry in return for a sharp mind and an even sharper pair of elbows. You know what you’re getting with a Goldman Sachs banker: a tough, no-nonsense, pragmatic deal-maker, even to a fault.

Jim O’Neill, though, was not a banker. He was a marketer. His job title for most of his time at Goldman was chief economist. That meant marshalling a young research department to produce ideas to help sell Goldman’s services. While Goldman’s real pirates were out pillaging companies and spitting on borrowers, O’Neill was composing PowerPoint presentations to help idiot-proof the bank’s big investment schemes. While the heavy-hitting partners merged, acquired and traded with Goldman’s own money, O’Neill sat in his office surrounded by framed drawings of his favourite Manchester United players thinking up acronyms. The most famous was Brics — Brazil, Russia, Indian and China — which he coined in 2001 and which became shorthand for the rapid growth of emerging markets.


For years, he wrote a weekly ‘Viewpoint’ for Goldman’s clients which often consisted of a few notes taken from the English edition of the China Daily, some vague macro-economic ramblings and a final laddish paragraph on the fortunes of his beloved football team. He had a peculiar habit of quoting himself: ‘As I like to say, investors don’t eat relative returns, they eat absolute returns.’ He was called a ‘rock-star economist’, not a label Mick Jagger was ever tempted to reverse.

To use an analogy O’Neill might grasp: for the government to think they have entrusted the Northern Powerhouse project to a rough-and-tough Goldman veteran is rather like a soccer team thinking they have recruited Lionel Messi from Barcelona — only to discover they’ve hired Dave Messi, the reserve goalie for the under-16s.

And that’s the good news. The bad news concerns O’Neill’s feel for economic growth. He thinks in terms of sets of numbers and league tables and countries racing to be the biggest, the richest, the wealthiest and the most influential. He spent all those Bric years so busily waving his pompoms that he rarely mentioned the darker sides of the countries he celebrated: the vengeful autocrats of China, the crony union bosses of Brazil, the nationalist socialists of India and the commodity-cursed oligarchs of Russia. Growing pains, he would say. Europe and America had had theirs, now it was the developing world’s turn. Only a snob would dare to judge their ethical or governance failings, or their various models of state-controlled capitalism. He sidestepped the awkward absence of correlation between GDP growth and stock-market returns and investors who followed his advice, notably in China, found that the value of their investments stagnated.

Challenged on the absence of democracy in China, O’Neill would respond with a line he claimed to have heard from an elderly Chinese woman: if democracy was so great, why did only half the people vote? If it were as good as sex, everyone would do it. He should try that at the DfID Christmas party.

O’Neill is a dismal economic determinist. This suited his job at Goldman Sachs, which was to juice deals and investment flows in dubiously governed countries. He never saw a problem with China’s extraordinary reliance on dollar-fuelled credit to fund its steroidal growth, and has argued that we should reward China by grovelling for more trade. He has written that individual European countries should cede their influence in major international economic and political organisations such as the IMF and World Bank to Asian, African and Latin American rivals for the good of the global economy.

Growth, in O’Neill’s view, is the sole economic good. If we challenge its nature or sources we are certainly on the wrong side of history, and almost certainly bigoted. When he talks about cities, he focuses on how proximity fosters competition, how seeing your neighbour’s enormous television makes you want to work for one too. He has lifted most of his ideas about ‘metros’, large multi-city regions, from the American academic Bruce Katz. They both see cities as hubs of innovation and rapid growth. String together enough universities, light railways, local businesses and creative professionals eager to turn factories into lofts, and the effects will save the economy.

But while Katz’s views are now washing up in London, they are going out of fashion in America. They are considered too prescriptive, too devoid of a sense of history. What works in Chicago may not work in St Louis. Encouraging more high-tech service businesses that sell to Asia is not a solution for every city. Sheffield deserves to be more than Shoreditch lite. The Katz-O’Neill consensus trivialises the complexities of city growth, the congestion and pollution, the sprawl. It has no feel for place. It is an airline-lounge view of how economies really work.

The Northern Powerhouse is a thrilling idea, with all kinds of significant implications. It would be a treat to see it in more inspiring hands.

Philip Delves Broughton’s books include What They Teach You at Harvard Business School and The Art of the Sale.

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Show comments
  • Sean Grainger

    Come on Goldmans finagled Greece into the single currency, surely all its alumni are sainted.

  • NBeale

    Grow up! You really think a fees-driven dealmaker would do a better job than one of the most respected economic thinkers in the global business world?? Who do you think is better placed to get the Chinese to invest in the UK.

    • van Lomborg

      Europe’s largest ongoing infrastructure and housing project by far has attracted a huge number of Danish investors.
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    • WFB56

      “..one of the most respected economic thinkers in the global business world”? Only someone not in the business world could make such an unsubstantiated claim.

    • Yvon & Barry Stuart-Hargreaves

      Respected economic thinker! Baron Gatley is a snake oil salesman. Economics ids a failed pseudo science. He quickly recounts how he predicted the rise of the Euro from 1.25 to 1.30 in 2004/05. Big deal ,one correct guess in 18 years.
      The BRICS acronym is a nonsense. Originally the S stood for South Africa, hilarious, based entirely on Mandela’s legacy earning them the World Cup from corrupt Sepp. Russia is a joke, based wholly on mineral wealth, an administrative nightmare run by a clique/mafia. India has failed to live up to any promise and its rich all hide in London like the Russians. China is a Communist dictatorship ,still.
      As for the MINT nations, Mexico is a future power like Poland ,but Nigeria, again hilarious and Turkey is looking increasingly creaky

      • Elephant

        Gatley is an affluent South Manchester suburb with rows of million pound houses and wall to wall Aston Martins,He has no more an idea of what the real North needs than someone born in Esher.If he had been born in Burnley or Bradford,he may have some clue of the effects of the North’s decline.Very little decline in the Tennis clubs of Cheadle,Bramhall and Gatley folks.

        • angryfrommanchester

          Gatley wasn’t full of wall to wall Aston Martins last time I looked (and I live a couple of miles away). It’s failry mundane – typical UK suburbia.

  • No. 7

    So respected that Goldman thought he was irreplaceable ? The Northern Powerhouse idea was just for General Election diversity promotion. It’s already in the bin. The government has just withdrawn funding for a paltry 35 miles of railway line electrification between Manchester and Leeds. (Compare with Crossrail). He’s a good spouter but nothing else. For God’s sake they’ve made him a peer of the realm. No worse accolade and no better indication of how this is all going to drift nowhere.

  • WFB56

    A great article and Delves Broughton deserves credit for writing it and the Spectator for running it.
    O’Neill is exactly the type of puffed up “B-teamer” that would have gone nowhere without the Goldman Sachs label on his card.

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  • In2minds

    I suppose Jim O’Neill replaces Michael Heseltine as the nations Mr Fixit, well that’s one good thing then!

  • justejudexultionis

    There will be no ‘northern powerhouse’ because the capital of the UK remains in London, because London receives disproportionate infrastructure investment when compared to the rest of the UK (even after taking into account its greater per capita GDP contribution), because none of the political parties have an ounce of common sense, because David Cameron is a coward and has no vision, because Osborne doesn’t really give a damn, because we do not have a fully federal system of devolved/regional government in this country…

    • The_greyhound

      It’s pretty clear from the dismal performance of the Scottish “Government” that arming some local councillors with a bag of money and some legal powers isn’t enough to create any sort of power house. In Scotland opportunity and money has been squandered by the incompetent and dishonest SNP on salmond’s personal quest for glory. Today, despite generous subsidies from London, Scotland has rising unemployment and low business confidence. Judged by their results we should be scrapping both the Scottish and the Welsh administrations – abject failures both.

      • Pacificweather

        Who is the ‘we’ who should be scrapping the Scottish Parliament and Welsh Assembly? The colonial power?

        • David S

          Nope. The same UK parliament including 56 SNP MPs (the most favourable representation relative to number of votes garnered) that decides on English issues. The only colonial activity on show recently was Ms Sturgeon’s attempt to call the shots in a potential Lab/SNP coalition.

          • Pacificweather

            So not happening any time soon.

            Lab/SNP coalition? When was that? Must have been a figment of your imagination. Are you a pollster by profession?

      • Elephant

        Wales is not a good example.They have been asked to run a devolved region,without proper resources.This is the problem with Devolution. It is an excuse for Central government to blame local politicians whom they have set up to fail. Very sneaky and very typical of Westminster.This will probably happen in Manchester too. The money that Osborne is giving to the city is peanuts. Less than a railway line is costing in London. The day will come when he turns around to the leaders of Manchester and says. ‘You wanted independence,it is not my fault if you cannot manage your own affaiirs’ The oldest trick in the book.

    • Franny

      If you take london’s income and offset all spending, including infrastructure, it still earns £36bn per year more than it costs. it isn’t bleeding the rest of the country dry at all – it is one of the few profitable assets that this country has remaining

      • Chris

        The rest of the nation doesn’t have anywhere near the investment that London has, that’s why London is so far ahead of anywhere else. London gets 24 times as much spent on infrastructure per resident than north-east England. People wonder why London’s so profitable and the north-east suffers, it’s because London is first in transport, finance, arts, media, government, education, corporate HQs, number of jobs, pay, wealth and size. London has a monopoly on everything, other nations have a rival city that is normally around half the size. Birmingham is an eighth the size of London. There’s no competition and the government offer no incentive.

        GDP per-person in the UK is lowest in northern Europe, why? Because all but London and south-east have been ignored for decades, governments suggesting that the money London earns is spread around the country. All the evidence is money earned by London is then reinvested in London, creating even more growth for London. This inevitably means that talent and investment is sucked out of the rest of the country into London i.e. bleeding the country dry.

        Recently there’s been a steady flow of people giving up London and moving to other cities, due to property prices. Hopefully this flight will help change the governments view on the capital, but I doubt it. They can’t even fund an electrified railway between Manchester and Leeds, binning their ‘Northern Powerhouse’ weeks after announcing it.

        • Franny

          You genuinely believe that electrifying a few railway lines will allow the north to rival London in any way, shape or form? I travel the line between Manchester and Leeds frequently, and I can tell you that while occasionally the train is a bit full on a football day (and that this is mostly the fault of a rubbish train company), there is a ton of spare capacity. Go to London, on the other hand, and everything is completely packed – at rush hour to the extent that you can miss three trains in a row (something that simply does not happen in the north). The reason for this is an exploding population – something that the north also does not have. The UK gets 300,000 net migration per year – the majority goes to the south-east – London in particular. So, back to my point – London needs huge infrastructure investment – the north doesn’t because it is not undergoing anything near the pressure that London is. Infrastructure is not a carte blanche to future growth – demand is, and good infrastructure only plays a facilitating role – London needs infrastructure because it is growing so strongly; it is not growing so strongly because it has high infrastructure investment.

          London is a global cultural, financial, legal and tourist capital – you cannot simply write to every other country in the world and say ‘well, actually, the north is quite nice too.’ Those people will never chose the north over London, and that is a fact – if people stop coming to London to work/live/visit, it will be because they have stopped coming to the UK not because they are diverting to Newcastle. London is not competing with the north – London is competing with New York, Tokyo and Hong Kong.

          150 years ago, historical studies of property prices have revealed that the north, as a whole, was richer than the south, as a whole. Evidently, this was due to the gargantuan manufacturing base there which supplied the entire world with textiles, steel, etc. These industries all left in the 1950s because of globalisation, although they had mostly been declining for a fifty years. That is the reason that the north east has suffered while London has thrived – the north-east’s industries were annihilated while London’s (finance, etc.) has remained globally competitive. London has not sucked the north’s wealth south – the north’s wealth has been sucked abroad. The reason why there is a brain-drain is because as a consequence of the diaspora, the north offers little opportunity.

          So, essentially, what would be a solution to the north’s problems is not throwing money at railway lines that don’t need more capacity, but rather the restoring of industry/manufacture. The only way to do this is with a complete rethink of the nation’s trade/economic policy to make the UK a competitive place to build again (bear in mind that London doesn’t build stuff – this has not been sucked into the south). It is not about rebalancing London, because previously London and the north were balanced (it is just that the north fell away leaving London), but about building something where there has been nothing for 50 years.

          And, as I have said before, London earns the government £36bn more than it costs – including infrastructure costs – so by definition, the money does not go straight back into London and is used to prop up the rest of the UK.

          • Elephant

            This is partly true,but the combined populations of West Yorkshire and Manchester is nearly six million.So how you can say that the line between Leeds and Manchester is hardly ever full is a ridiculous comment.That line is truly hideous.London does compete with New York,Hong Kong and Paris,but so does Frankfurt and this does not mean that people in Hamburg,Munich and Dusseldorf should be ignored as irrelevant.Manchester and Liverpool are the two most creative cities in the country.Why should people from those cities have to live in Islington to make a living,when you can communicate in this day and age with Sydney in a split second.However you pitch it,it is not acceptable,that the economy of the country is run to benefit just one corner of the UK.There is too much investment in London.They are spending more on extending the Northern line(Irony of ironies) than Birmingham a city of over a million people is getting in ten years for transport. This is bordering on regional racism.Let us also not forget the revenue from North sea oil.Glasgow has the lowest life expectancy in Western Europe.Why is Scotland not the richest part of the UK? This is because the benefits of this went to reducing taxes,which created the ‘Big Bang’ in the 80s,which allowed London to prosper at everyone else’s expense.It is not acceptable.Just because you happen to live there and are benefiting from it does not make it right.You talk about the North,like it is East Anglia or Cornwall.Not a place with 14 million people which contributes 300 billion pounds per year to the economy. That is nearly 30% of the 5th biggest economy in the World.

          • Franny

            1) You assume that I am a Londoner. I was brought up in Derbyshire and now split my time between Cheshire and Durham, among the very same mills and mines that you refer to. I only ever lived in London for a few years. 2) I know perfectly well what the line between Manchester and Leeds is like because I travel on it more than 20 times per year. The problems with the line extend from the fact that it is run by First Transpennine Express, arguably the worst train company in the existence of mankind. Passenger capacity is not helped by the rubbish German trains that they decided to get on the cheap. My basic point holds, however. The line itself does have capacity remaining. The only times I have ever had problems getting on a train have been on football days – compare that to London rush hour where it is perfectly normal to miss 5/6 underground trains because they are so full and people actually die because there is no space on the platform. 3) Your point about Birmingham probably holds – I don’t really go there, so don’t know, but city links do add to the economy. My actual point is that there will be no significant economic benefit from linking up different northern cities with faster trains. Down south it makes sense – London has high prices but is a financial hub so it makes sense to shift low-grade jobs out to regions where they can be done cheaper. In the north, this argument simply doesn’t hold because labour/property/capital prices in Manchester and Leeds are not that different or even that high, meaning that there is little conceivable set of circumstances in which a company will split itself between Leeds and Manchester and will need a fast rail link to coordinate it all. 4) I agree that there is a problem of lack of economy in the north, but this cannot be solved just by throwing money at railway lines (although a new national freight line or inner-city links would help). Infrastructure in itself rarely causes growth unless there is significant demand for it in the first place. 5) Compared to the global financial capitals, Frankfurt is irrelevant. It is growing, but still tiny – and is growing slower than London, NY, etc. Why I think London should get more investment is firstly because it pays for it itself (surplus of £36bn, after infrastructure spending – there is no way that the north could produce this just if we spent the same amount on it as London) and there is clearly more demand for it (immigration swelling the city”s size, dangerous rush hour conditions, etc.). 6) London never prospers at the rest of the country’s expense – when London prospers, Britain prospers and vice versa. It is a tired old meme that when a bank makes money, it is because its clients have gone bust. Funnily enough, it is a banker’s worst nightmare that any one of his clients goes bust. 7) The oil was used to fund the NHS primarily (nationally, not in London alone). Deregulation was part of a wider global trend and had nothing to do with North Sea oil. 8) The north, in terms of government revenue, gives less than it gets. So does the South-West. So does Scotland. So does the rest of the country, apart from London and the South-East – they are the only regions that give more than they take.

          • Elephant

            I lived in West London for many years and yes I remember busy tubes,buses and other modes of transport,but I also remember frequent ones. For instance tubes to Ealing Broadway,where I lived at one time in the 1980s were every few minutes,so if one was full,it was not a great problem waiting for the next.They were every 5 minutes at all times,even when the trains had half a dozen people on them. So your comment about overcrowding is true at times,but is not a huge problem,as people will soon be on their way.This is the not the case if you live in Leeds and want to go to Harrogate,for example.If you cannot,or do not get on a crowded train,you will wait half an hour or longer,on a freezing cold platform for another one.The tube trains have plenty of carriages. A lot of the trains in the North have only two,which means people invariably have to stand.The trains which link Leeds with it’s outlying hinterland are similar to the ones linking Cornish fishing villages in the Winter. This defies belief. As for the Leeds/Manchester line. The reason why there is capacity as you say on this(I rarely use this line,so I will accept your point,although the local news reports I have seen suggest otherwise),is because it is so poor.People jump in their cars and drive between the two cities,because they do not want to sell their soul to buy a ticket and it is less hassle.Plus Leeds has appalling connections to the centre from it’s suburbs,as I just said,with no trams,or even decent buses.By the time you have fannied about going to Leeds station,you are almost in Manchester.However,the problem with this is that at rush hour the M62 to Manchester,is like a car park.Decent transport links would alleviate this.Manchester has better transport than everybody else,but even in Manchester a lot of it’s outlying areas are poorly served. Bolton and Stockport,have a combined population of half a million people and neither of those towns and the places between them, are on the Metrolink.The other bugbear for me is the atrocious links between Sheffield and Manchester.There isn’t even a decent road.As for if London prospers Britain does? That surely cannot be a serious comment? I suggest you ask people in the old mining communities of County Durham that question and see what your answer is.Up until that point,I found your argument sound and interesting,but then it sounded like a comment from George Osborne’s pre-election budget.’We cannot make the rest of Britain prosperous,by keeping London down’ The reverse has been the case for decades and anyone with half an O-level would know that. The only place that prospers through London,is London and the towns around it that keep it afloat.As for it’s surplus to the economy,this is down to over investment at everyone else’s expense and lots of tourists.The French have a World capital,but they manage to provide proper transport links for their other places,without much of a problem.I was in Rennes in Brittany in July,a city similar to York in stature and they actually had an Underground.I rest my case.They are able to provide an Underground in a city that size,but we are not able to provide one for Birmingham.Why? Because the rest of us are left with the leftovers London doesn’t get.As for Industry having no future,hence there being no reason to invest in it. Farming was/is not profitable,but they always find money to subsidise that. Plus if our industrial heartland had been in the South East I am sure that money would have been found from somewhere to maintain it,because it took Brown a day to find billions to prop up London’s teetering economy during the financial crisis.If my neighbour has £5000 to spend on her house and I only £10 to spend on mine,then of course her house is going to be in better shape than mine.That is the difference in Transport spending between London and the South East and the North East.

        • Elephant

          This is a good point. Britain’s other cities are kept artificially small to keep this London domination intact. If Greater Manchester was the city of Manchester,it would have a population of three million,if it’s hinterland was included,like North Cheshire and Warrington,nearer four million. All our cities are ridiculously small.How can a city compete internationally with half a million people in a global economy.This is deliberate.Even the names prevent expansion.Greater Manchester excepted,all the names give no indicator of where these cities are.West Yorkshire and the West Midlands do not sound like cities if you are foreign and want to invest,they sound parochial.Why not Greater Birmingham and Greater Leeds. Why are Manchester’s boroughs referred to as Metropolitan boroughs rather than the Greater Manchester boroughs of Trafford ,Tameside,Bury etc?. The same as the London boroughs.This would then let people know that if they are to open an office in Trafford for instance,they are near to an international airport. from which the Airbus flies. If you see Sale Cheshire written down and you live in Shanghai,you would think rural,if you did not know where Sale is.

      • Elephant

        Let us not forget the 700 billion pound handout Gordon Brown gave London to prop up it’s failed banking industry. That sort of bailout was not forthcoming to save the jobs of people who make things, in the 80s.So do not be so smug about what London contributes.In the 19th century,London with no natural resources did very well from the wealth of the Industrial cities of the North in paying for it’s infrastructure.Do you think the underground was paid for from Summer walks and cream teas in Hyde Park?

        • Franny

          1) Banking is still profitable in the long term – it was more of a bad investment (losing £50bn after they have been resold to the private sector) than a bailout. Keeping the industries in the north alive in the face of such foreign competition would have been sheer economic madness – because there was no long term prospect of profitability (clothes today are produced at a fraction of the cost that they were in the 1980s). 2) That is a very superficial (and factually incorrect) view of how imperial economics worked. Yes, the north then was prosperous – but London was more so. The north as a whole was more prosperous than the south, but London was always richer. This is because economic power was founded on the back of trading monopolies in certain commodities, later manufactures, and later still, finance. To put a one year course into a few sentences, British companies/naval power allowed us to occupy the trade routes/sources of important commodities (e.g. spices, sugar, etc.) which became the foundation of our prosperity. This was all run from London. Later, the new world allowed us to transplant goods for intensive growth and the monopolisation of manufacture – in this, the north played a part through its factories, but London was not unprofitable. The final phase, the one that supercharged the UK economy, was the advent of global finance. This dominated the last hundred years of empire, and was run almost exclusively from the City of London. In actual fact, it was the profitability of these services that propped up the bloated manufacturing sector for so long in the face of more competitive companies from Japan, Germany and the USA. So you are wrong – London more than paid for its underground system.

          • Elephant

            Banking could have been sent to Shanghai the same as manufacturing.The highly paid jobs of those who work in the City,could be done a lot cheaper in Mumbai and China.However you try to pretend that banking needs to be done there ,it does not.If engineering can be done in a low wage economy,then so can service industries.It is easy to destroy jobs in Liverpool and Newcastle when you are two hundred plus miles away. Different when you are 5 minutes down the road in Westminster.

  • Fraser Bailey

    Great piece. Much needed.

    • Terry Field

      Great niece. Much peeded.

  • sir_graphus

    It won’t be a Northern Powerhouse. It’ll be a Labour rotten borough like Wales.

    • Pacificweather

      1997-2008.

      • sir_graphus

        That was public sector paid for by borrowing and (London) banking profits.

        • Pacificweather

          Banking profits are all we have left. Manufacturing is only 16% of our economy. Also, you forget the very large growth in private sector coffee shops and shops selling clothes made in Bangladesh or the increased sales of cars made by German companies that created all those shiny new glass and steel car showrooms. That’s what expansion of the British economy looks like these days. It is true that bankers are Indian Givers and that it is never long before they want the money back but it was ever thus.

  • WarriorPrincess111111

    A very tactfully written report. Anyone or anything associated with GS makes me very cautious and any subsequent events by that factor makes me want to ensure I know a good barrister.

  • john

    I don’t know what a “Northern Powerhouse” is and can be quite sure it will be of no value. It sounds like a rerun of the 60’s attempts at boosting ‘t North. These were a total failure. The fundamental reson is that the London elites have zero interest in seeing economic and political power move North and simply want a Potemkin economic policy.

    • Pacificweather

      They are harking back to the halcyon days of the 19th century and the Corporation of the City of Manchester.

  • john

    Northern Powerhouse. Is this Watford?

    • Terry Field

      Not that far north, surely!

  • goggyturk

    Sounds like the ideal man to lead a project that’s already been binned.

  • Partner

    Really good journalism, in my view. Taking a set of half throught through perceptions, and shredding them in favour of the truth. Just the kind of thing that would improve the grovelling FT no end.

  • John Carins

    “The Northern Powerhouse is a thrilling idea, with all kinds of
    significant implications. It would be a treat to see it in more
    inspiring hands”. It is not a “thrilling idea”, it is a soundbite designed to seduce idiots. Please remember the last big idea “The Big Society”. What has happened to that? Tumbleweed. Let’s go the whole hog and have “The Big Northern Powerhouse Society”!

  • vvputout

    Agreed – JO’N is useless.

  • john

    The idea that the Tories have any interest in anywhere in the UK outside the M25 is comical. Until the Northern sans culottes get of their backsides, pick up their pitchforks and march down the M1, Britain will remain a hinterland ruled by a colonial oligarchy.

  • sarahsmith232

    This is how males do bitching and gossiping. We females will do ‘what did she look like in that dress, did you see the state of all her cellulite on show’. Males will do ‘he didn’t really make that much money and his car really wasn’t so great, actually, I heard it was at least 1year old’.
    So who’s the bitchy jealous writer? Someone that saw himself as very much the superior but has never really done much with himself, I presume?

    • Yvonne Stuart-Hargreaves

      Only the dim and the too rich to have any sense buy new cars. Get one about 9 to 18 months old, under 10,000 miles. Picked up a 63 plate C Class Merc for £18,000 in April.

  • its a wonderful life

    The Wrong Man indeed… Philip Delves Broughton has chosen the wrong man for his ire, and his entire article about Jim O’Neill is nothing more than a botched personal attack. Philip first and last met Jim O’Neill in July 2011, Jim’s PA convened two meetings with him on July 6th and 7th, when he was contracted by Penguin Books to act as a guiding editor on The Growth Map, Jim’s first book on the BRICs; a term which Delves Broughton now claims O’Neill created in his office, while contemplating Eric Cantona’s number 7. The only reason Delves Broughton even appears intimate with the décor of Mr O’Neill’s office is, because he was kindly and with trust invited up there, and paying him a large fee for his time.

    Jim had agreed to publish a book on the BRICs, and publication was due in November 2012. The contract with Jim was not agreed until June of 2011. However, Jim was determined that publication should coincide with the BRICs anniversary in November 2011.

    To write a book as complex as this one, in eight to ten weeks, would impact the quality of the work and Jim was taking a huge risk. He was reluctant to take on additional help and wanted to write the book himself, stretching his schedule in a way which is typical of the professional attitude at Goldman. Eventually, he agreed to editorial support after some coaxing. Philip Delves Broughton was selected by Penguin from a handful of names to help get Jim started, and he claimed to be delighted to work on a book about the BRICs and to be working with Jim. Surprising then, that he is now making a very personal attack on the work of a man he both admired and was so keen to support.

    Jim did not want the advance broken into by the editor’s fees. He negotiated with Penguin that the Publisher pay part of the fee and he would pay the balance. He paid £15,000 to Penguin so that they could pay this amount to Mr Delves Broughton, for two weeks work. This money was paid from his own private income.

    Jim had also dedicated his entire advance, all royalties and earnings from foreign rights sales to his charity SHINE.

    PDB had two in-person meetings and continued to work remotely for the remainder of his two weeks. He already had a pre-booked vacation which was likely to affect the continuity of the work.

    Jim put himself under intense pressure to deliver something of the highest standard and to a ridiculous deadline. He pushed himself to arrive there, and not always perfectly. He didn’t write the book for accolades or for adulation. He wanted to raise money for the educational charity, SHINE.

    Dr (now Lord) Jim O’Neill has earned his titles; first his degree and his MSc at Sheffield, followed by his PhD at Surrey. While he is proud of what he has achieved, he says he recognises that he might not have attained his success without the support and opportunities given to him and his sisters, by their parents. He attended very ordinary schools and he created his own opportunities.

    Jim feels very honoured to be given a peerage, although he would say he still can’t quite believe it. He has not lobbied for a role in Government and fell into it quite by accident. In 2011/12 he was feted to be the next Governor of the Bank of England after Lord King. He was rather in shock at the prospect and considered even the possibility to be both too soon and that the Government would and should not –in the event- favour someone coming directly out of Goldman or any other bank. When he left Goldman, he wanted to continue with the work he had been doing unpaid and under the radar (while working full-time at the bank), serving on various committees related to various business and community/charity initiatives in Manchester; he also wanted to continue with the work he has done supporting disadvantaged children in education –helping the charity SHINE to continue its growth and success and by continuing his work with other educational boards.

    Jim also stepped down from his Board level post at the economics think-tank Bruegel and became a Bruegel Research Fellow, contributing to papers and round-table events at Bruegel, rubbing shoulders in a workaday manner with those who were now colleagues.

    Jim was head hunted by Goldman, and he was made a Partner on joining the firm –a rare privilege. He earned the role of Global Chief Economist (B-Teamers don’t earn the longevity of career that Jim had sustained at Goldman) and he has always put it down to luck, his coining of the term BRICs. Jim has said that he and his team spent much of their time looking at these economies and later others, and were the first to create a buzz around them, utilising the fantastically well honed research and data that Goldman was producing. Jim has never claimed that those economies did not have problems or that growth anywhere in the world was without complications.

    It is the ten years plus work that Jim has given to the BRICs research, together with the unpaid work he was doing, with various boards in Manchester that made him the right man to Chair the Cities Growth Commission, and makes him the right man now to direct the Northern Powerhouse. It is his highly regarded work, which began with his academic research of deeply searching problems in our own and other economies in the seventies and eighties and his continuous dedicated career as an Economist and thinker, both at home and globally, that likely brought him to the attention of the Prime Minister both for the Cities role and to lead on the AMR. Jim himself, says that he didn’t feel remotely prepared for the AMR role, with no medical or scientific background, but his confidence in his skills as an Economist is not misplaced and nor should he be disregarded (for this or his Cities work) as some “airline lounge view of how economies really work”, as Mr Delves Broughton would have you believe.

    That Jim O’Neill has managed to convince the Tories to champion the constituencies of the North again with the credible and highly-regarded work he and his team at the RSA delivered within months, is a rare achievement. That he will somehow manage to achieve half of what he wants, given the Government’s U-turn on transport plans for the North, is anyone guess but, if anyone is capable of pushing for transformation of Manchester and its sister cities, then O’Neill is not only the right man but, probably the only man. What he cannot do, is do it alone.

    There is nothing in this article other than very personal ‘opinion’ and attack, an opinion that is not even based on his very genial work meetings and a very lovely long thank you lunch Jim invited him to, after. His observations on Jim’s career are wildly inaccurate and his slating of Jim’s work at Goldman, from 1995 to 2013, is written in colourful language but lacks any substance. Jim never promised a BRICs utopian world-view. His weekly Viewpoints was cited often enough by the media and others and if Mr Delves Broughton found it “vague..ramblings’ then plenty of people did not. Jim would often draft the newsletter and turn it around over the weekend, drawing on his own research, his travels and high-level meetings. A colleague would fact check and another would edit –quite a lot of work for a lengthy paper distributed week in, week out for most of the year. The reference to Jim’s time at the Asset Management division is shallow and incorrect. Mr Delves Broughton does not know the circumstances of the appointment or, when and why Jim decided to retire from it.

    We would like to acknowledge Philip Delves Broughton, for his contribution to The Growth Map, Economic Opportunity in the BRICs and Beyond (Penguin Dec 1, 2011). Jim was never satisfied with how that first book turned out, and that is no reflection on Mr Delves Broughton. He set himself an almost impossible task and, by some miracle and with the support of many people –because teamwork we all know is often the reason things actually get done- he somehow brought the book to completion, though he will always feel he fell far short of creating the very best book he would have liked. Still, it was published in time for the tenth anniversary of the BRICs and that was an achievement in itself, and it raised money for SHINE and for that many people are most thankful. The BRICs book was serialised in the Telegraph, it was sold into 14 territories and several languages including, German, Chinese Mandarin Japanese, Korean, Spanish and Brazilian Portuguese. The BBC followed up by commissioning four one-hour episodes for a radio 4 series on the MINT countries.

    As for Manchester United, without groups like the Red Knights and MUST we would not have challengers to speak up and tell the other side of the story. .

    For most of his working life, Jim has lived in Greater London and not in Surrey.

  • KarenTGreen

    next few days your life success days….spectator…. < Find Here

  • mikewaller

    I may be jumping to conclusions, but this article does tend to suggest that Mr Broughton is not overly fond of Mr O’Neil!

  • global city

    All of these schemes are still basically statist inspired programmes of control and shuffling things around. The very existence of big government began the rot of any ‘power’ (basically freedom) had generated previously. Everything now resides in Whitehall, Westminster, the City……… or Brussels. This is intended to grow even more, so the Northern Powerhouse, even if it worked in pure numbers of ‘jobs’ say, will only work as some sort of revamped 1950s’ type ‘regional development policy’.

  • MathMan

    ‘Northern Powerhouse.’ Sounds like a job for Prezza!

    • Terry Field

      Northern codswallop?

  • flying dragon

    I knew Jim pretty well, and prior to his Goldman days – that institution is capable of messing anyone up – he was a down to earth currency strategist, and a very good one at that. He had an excellent feel for markets and an ability to see through the bullshit. He was also a good laugh.
    Most of that disappeared in the Goldman years. i think some of his views on and coining of BRICs was due to the fact that he was not wholly comfortable in the pseudo-intellectual world of big bank economic research – he succeeded Gavyn Davies, which was faintly ridiculous.
    He’s actually a sharp thinker, rather unconventional, at heart.
    If the real Jim still exists under the GS version, they may actually have someone who can make a positive contribution, in a genuinely unconventional manner.
    If not, much of the above is probably correct, though the man is not the miserable one portrayed.

    • Terry Field

      I agree; my dealings with him confirm his sharpness – and what a contrast in independence of mind from the ‘civil service’ bunch.
      He can do a lot for the north.
      It will not make it less grim though, will it?!?!?

      • Elephant

        Maybe he should start with the South.Have you seen some of those nasty towns in Estuary Kent and Essex?They don’t even have the saving grace of beautiful countryside around them,that the grim Northern towns have. God bless anyone who can only aspire to live in those dumps.I used to work in Watford.

        • Yvonne Stuart-Hargreaves

          Correct. I give you ; Swindon, Bridgwater, Redruth, Slough, Hastings, Folkestone, Gravesend, Herne Bay , Chard.

          • Elephant

            Luton is the most depressing place I have ever been to. Soul destroying hell hole.I have never understood why there is an airport there.Presumably so people can escape.

          • Yvonne Stuart-Hargreaves

            I can also give you; Shelton Mallet, Watford, Plymouth, Portsmouth, Margate, Crawley, Basildon, Redditch and Trowbridge.

          • Elephant

            I lived in Watford and I have never been anywhere as rough on a Saturday night as that.The problem with the South is once you leave London it isn’t very nice.I am not sure how people who live in those places can be so smug about the North.The North has an excuse as some of the towns were wall to wall factories which are mostly gone or derelict.What is Watford’s excuse?Not sure about Portsmouth interesting museums.Plymouth has the worst shopping centre I have ever seen.People in the North wouldn’t put up with rubbish like that.

          • Yvonne Stuart-Hargreaves

            Of course the North has; Stamford, Beverley, Durham, Harrogate, Chester, Gainsborough, Keswick and Hebden Bridge.

          • Elephant

            Many gorgeous towns and cities.York knocks everywhere in the South into a cocked hat.The Ribble Valley in Lancashire has stunning small towns and villages(The Queen said it was her favourite part of England) and the areas around Skipton and Bolton Abbey are breathtaking.To see scenery like that if you were a Southerner you would have to drive to Wales.Anyone who thinks the North is grim should get out more. We have towns which were once mighty industrial powerhouses which have sadly declined,as manufacturing has declined,but even these towns have stunning Victorian architecture and Town Halls which look like the Vatican. No town in Southern England has a town hall to rival Bolton,Rochdale,Halifax and Huddersfield. Manchester and Leeds town halls are both masterpieces of civic pride and Liverpool has the finest waterfront in Europe.The towns you list are all grand.Durham cathedral is regarded as the finest building North of the Alps by some.(Do not know Gainsborough,but next time I am in Lincolnshire I will check it out)

          • Yvonne Stuart-Hargreaves

            Yes. I forgot Ripon, Bakewell and Matlock. Gainsborough is marvellous as is old Lincoln. But Stamford has the best collection of mediaeval churches of any small town in the UK.

          • Elephant

            Yes I know Stamford. A very underrated city is Lancaster.It is surrounded by the Lake District,The Trough of Bowland and Morecambe Bay.I cannot think of anywhere which is more beautifully sited.The city itself has beautiful Georgian architecture,lovely parks and riverside walks.Plus the castle with an amazing view over the sea.It has a great social and cultural scene and a highly regarded university.Would you rather live in High Wycombe? Or Basildon? These people in the South are brainwashed to think they are superior and luckier because of London. If you took London out of the South.All that would be left would be a few drab commuter towns and Brighton.

  • John P Hughes

    Jim O’Neill (Lord O’Neill of Gatley)is the sixth and lowest Minister at the Treasury, with the title ‘Commercial Secretary’ which does not seem to have existed as a title before. And he is unpaid. It is all rather odd. The positive aspect of this strange appointment is that it can be ended without notice and at no cost to the Government.
    The Treasury website has the following useful information at
    https://www.gov.uk/government/people/jim-oneill
    Readers may wonder whether Lord O’Neill has ever had a proper job other than at Goldman Sachs (see article above for an assessment of what that involved).

    “Biography

    “Jim O’Neill worked for Goldman Sachs from 1995 until April 2013, spending most of his time there as Chief Economist. He chaired the Cities Growth Commission in the UK until October 2014 when it provided its final recommendations. Jim is currently chairing a formal Review into AMR (anti-microbial resistance), which will make recommendations on how to solve this global challenge in spring 2016.
    “Jim is Honorary Chair of Economics at Manchester University. He is also a Visiting Research Fellow at the international economic think tank, Bruegel, and on the economic advisory board to the IFC, the investing arm of the World Bank. He is one of the founding trustees of the UK educational charity, SHINE and serves on the board of ‘Teach for All’ and a number of other charities specialising in education.
    In September 2013 he became a Non-Executive Director of the Department of
    Education.
    “Jim earned BA and MA degrees in economics from Sheffield University in 1978 and a PhD from the University of Surrey in 1982. He has honorary degrees from the Institute of Education, University of London, for his educational philanthropy; City
    University for his services to banking and finance; and Sheffield University in
    recognition of his contribution to international economics.

    “Commercial Secretary to the Treasury:

    “The Commercial Secretary is responsible for:
    Northern Powerhouse
    city devolution
    infrastructure policy
    Infrastructure UK
    corporate finance, including public corporations, public private partnerships, PFI, and sales of government assets
    better regulation and competition policy
    industrial strategy
    working with the Minister of State for Trade and Investment and UKTI to promote the UK as a destination for foreign direct investment”

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