Why the prime minister's top economic adviser said no
Lord Jim O'Neill has decided not to take a formal job in Andy Burnham's government. He was offered the role of chief economic adviser to the prime minister but turned it down. O'Neill told the BBC he did not want the restrictions the job would bring, such as giving up control of his business interests and putting his investments into a blind trust — a system where someone else manages your money without telling you what they are doing, so you cannot make decisions that benefit yourself BBC.
O'Neill is a crossbench peer, which means he sits in the House of Lords without belonging to any political party. He was previously the chief economist at Goldman Sachs, one of the world's biggest investment banks. He said his decision was not about disagreeing with the government's policies. He described himself as "a fan of the focus on devolution" — the practice of handing power from central government in London to local regions — and said he would keep an informal relationship with the prime minister and his team BBC.
The news ends weeks of uncertainty. As recently as 5 August, the roles on Burnham's economics team had not been finalised, with ongoing talks between the two sides City AM. Before the election, O'Neill had been advising Burnham and urged Britain's next leader to be "bolder" on borrowing money to fund investment. He also argued that fiscal credibility "cannot be judged by a single figure" Reuters. He spoke to the BBC about Britain's economic challenges in a recent interview AP.
O'Neill has a rare mix of City of London credibility and local roots. He grew up in Greater Manchester, the area Burnham represents in politics. From 2015 to 2016 he worked at the Treasury under Chancellor George Osborne, where he helped push the Northern Powerhouse agenda — a plan to boost the economy of northern England. In the economics world, he is best known for inventing the term Bric in 2001 to describe four fast-growing developing countries: Brazil, Russia, India and China. The group later became Brics when South Africa joined BBC.
The broader context here is that the prime minister is putting together an economic team at a difficult moment. Burnham faces growing challenges ahead of his first Budget after the UK's fiscal deficit — the gap between what the government spends and what it collects in tax — unexpectedly widened FT. O'Neill's comments on borrowing and fiscal credibility had made him an important voice in shaping the government's economic plans. By choosing not to take a formal title, his influence will continue but without the rules that normally apply to official government appointments, such as transparency requirements and the blind trust rules he mentioned. He can keep his private business interests while advising the prime minister, but Burnham is left without a named economic adviser at a time when the financial picture is changing.
For a government that made devolution a central theme, losing a figure who connects the world of Westminster and the Treasury with Greater Manchester's local government carries a cost. O'Neill's Northern Powerhouse work and local ties made him a natural link between Burnham's focus on regional power and the big economic questions a first Budget must address. The informal relationship he will keep means that link has not been broken. But it is now a private conversation rather than an official one, and that difference matters for a government that needs to show its economic team is both trustworthy and answerable to the public as it faces a tighter financial situation than it may have expected.
