Lord O’Neill declines job in Burnham government
Former Goldman Sachs executive and Tory Treasury minister Lord Jim O’Neill has declined a job in Andy Burnham’s government, in a blow to the Prime Minister as he looks to woo business ahead of the Budget.
O’Neill served as an informal economic adviser to Burnham before his election as Labour leader and had been in talks to join Burnham’s government in a key economic role, Morning Wire was the first to report.
But it has now been confirmed that he has rejected a formal role. The decision was due to his desire to retain control of his own investments rather than any bust-up over policy, Morning Wire understands.
O’Neill told the Financial Times on Friday that he enjoyed his current roles in the private sector “too much”, adding he did not want to place his assets in a blind trust while serving in an official role.
“It’s not because of any policy disagreements. I’m a massive fan of the focus on devolution and I hope Andy and his team will be bold on this and everything else,” O’Neill said.
The economist’s decision will strike a blow to Burnham as the Prime Minister looks to win round business and investors. O’Neill was one of three heavyweight advisors reported to be advising Burnham just before he was elected as an MP for Makerfield.
The other economists, former Office for Budget Responsibility chair Richard Hughes and ex-Bank of England chief economist Richard Hughes, have also not joined Burnham’s team in any official role, Morning Wire reported earlier this month.
Former Bank of England deputy governor Minouche Shafik has also left Number 10 as an economics adviser.
It has left a hole in economic expertise around Burnham and Chancellor John Healey’s advisory teams. Other key economists John van Reenen and Anna Valero, who were part of an economics council advising Rachel Reeves, no longer hold roles in government.
Neil Amin-Smith, a former adviser to Reeves in the Treasury, has been kept on as an economic adviser to Burnham, it has been widely reported.
Burnham ‘needs economic expertise’
One Labour source told Morning Wire that they feared Burnham still needed key economic hires in teams to maintain credibility with markets and businesses.
Budget preparations are already well underway, with a two-month run-in set to put John Healey under pressure as the Iran war drags on, growth slows down and interest rate hike fears intensify.
Several economists have said that while the £22.7bn fiscal headroom is likely to have eroded since March, Healey does not need to raise taxes to keep public finances afloat.
However, with a raft of spending measures on the cost of living and calls for a hike in defence expenditure, taxes could be raised to fund exp