Lord O’Neill turns down role in Burnham’s team, raising questions ahead of budget

Lord Jim O’Neill, a former Goldman Sachs executive and ex‑Tory Treasury minister, has turned down an offer to join Andy Burnham’s government. The decision was confirmed after O’Neill told the Financial Times he prefers to keep control of his own investments and does not want to place his assets in a blind trust.

Why the refusal matters

The snub comes as the new Labour leader seeks to reassure markets and business leaders ahead of the upcoming budget. O’Neill had been an informal economic adviser during Burnham’s leadership campaign and was expected to take a senior role in shaping fiscal policy.

Other missing advisers

O’Neill was one of three senior economists reportedly in talks to join the team. The other two, former Office for Budget Responsibility chair Richard Hughes and ex‑Bank of England chief economist also named Richard Hughes, have likewise not taken up formal posts. Former Bank of England deputy governor Minouche Shafik also left Number 10 as an economics adviser, and economists John van Reenen and Anna Valero are no longer on government councils. Neil Amin‑Smith, a former Treasury adviser to Rachel Reeves, remains as an economic adviser to Burnham.

Budget pressure and the road ahead

With the budget only two months away, Chancellor John Healey faces a tightrope. The war in Iran, a slowdown in growth and fears of further rate hikes are squeezing the fiscal outlook. While a City economist argues that the £22.7 bn fiscal headroom announced in March has likely shrunk, he also says Healey does not need to raise taxes to keep public finances afloat. However, spending on cost‑of‑living measures and a potential boost to defence could force a tax increase.

Burnham will now need to fill the expertise gap quickly to maintain credibility with investors. The next few weeks are likely to see a scramble for senior economic talent, and the final budget will reveal whether the Labour government can deliver a growth‑friendly plan without the benefit of O’Neill’s experience.

“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.