Ahead of Budget, Lord O’Neill, adviser to two PMs, says Tories have last chance to level up Britain and save the Red Wall

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Jim O’Neill is not the kind to mince words. The former chief economist at Goldman Sachs and a former adviser to two prime ministers says there is little time for the Tory party to win the hearts of voters in the north of England.

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Those who defected from the Labor Party in the last election are still waiting for proof that the economic “levelling” of the regions was not an empty promise.

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Speaking just 11 days before Chancellor Jeremy Hunt makes one of the most important budget announcements in decades, he said: “This is the last chance to vote for the Red Wall. If the Conservatives get it wrong, it will be too late and it will be a gift to the Labor Party.”

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Northern Soul: Lord O’Neill’s investment firm Northern Gritstone has £215m to invest in northern firms.

Lord O’Neill is perhaps the best equipped for such a judgment. The Manchester United fan – he once even tried to buy the club with a consortium of investors – worked with David Cameron and Theresa May. He was one of the chief architects of the North Power Plant, a body set up by the Tories to boost economic growth in the North.

More recently, he set up an investment fund to support firms that could stimulate trade and create jobs in the very areas that lag behind London.

O’Neill admits Hunt’s hands are tied as he hopes to fill a £50bn hole in the nation’s finances. But he says the new chancellor should make some investment promises to support problem areas.

“There must be some ambition, otherwise we will never get out of this trap of short stature. More attention needs to be paid to skills and investment.

“Investment incentives should remain as long as the government needs to make it easier for pension funds and insurers to invest in funds and companies at an early stage,” he says, referring to schemes such as the annual investment incentive, which gives tax breaks to businesses that invest in new plant and equipment.

The leveling was first used in the Conservative Party manifesto in 2019 and was a policy to reduce imbalances across the country. But Covid and a series of Tory disasters of its own have pushed that policy back onto the agenda.

O’Neillis is hoping the Tories can pull him out of the fire after the disaster that was caused by former chancellor Kwasi Kwarteng’s September budget that left Britain’s finances and bond markets in the doldrums.

“Never in my professional life have I seen anything like it. He announced an unfunded tax cut without an Office of Accountability forecast. It was frightening naivete.

“But the adults were back in the room and Hunt impressed me. I hope he doesn’t disappoint me.”

So far, the signals from Prime Minister Rishi Sunak, who has publicly supported the level increase, are mixed, but has yet to signal his commitment to investment zones or the HS3 link between Leeds and Manchester.

This irritates O’Neal, whose top priority these days is to close the North-South productivity gap. The 65-year-old believes one answer is to merge the cities of Manchester, Leeds, Sheffield and Liverpool into one economic zone.

He wants the area to be like America’s West Coast, specifically the San Francisco Bay, giving Britain much-needed growth at a time when the nation so badly needs it.

O’Neill points to the unique geographic location of these four northern cities, explaining that they are only 80 miles apart at their furthest point. At the very least, Liverpool and Manchester should be a Dallas/Fort Worth-style metroplex. “If you look at the whole area that extends around this part of the north, you get eight to nine million people.”

He admits that London is being brain drained; he himself a “proud Mancunian” is typical of this. But he says: “If you can create a single economic market in this zone, it will be a different London. If you could pull it off, it would increase the UK’s national growth.”

Born in Gatley, outside of Manchester, O’Neill is a passionate northerner who advocated leveling up long before it was fashionable.

He is best known as the acronym king who coined BRICS as chief economist at Goldman Sachs, putting Brazil, Russia, India and China at stake.

He has no manners and graces, he is physically tidy, and his conversation is rife with references to Manchester United. He effectively fell out with Theresa May in 2016 and resigned. “She liked the idea of ​​doing more for difficult places, but she was against the North Power Station because it was owned by George Osborne, which was pretty stupid.”

He is dismissive of how the Tories are currently selling level ups to the public – “slogans, no real substance or depth.”

With so little progress in leveling the country, politics became increasingly fragmented, especially for conservative voters in the South.

O’Neill is aware of this, saying: “It is portrayed as all at London’s expense, and the Mayor of London publicizes this fear quite often. But it won’t hurt London.

He is equally critical of Northern politicians who fall short of his ambitions and “take the position of poor little me in the North, what about me in the North”.

Fed up with the political classes and their failure to stimulate private investment in the North, O’Neill acted alone.

His latest project, Northern Gritstone, is an investment vehicle to support companies emerging from leading northern universities that are raising a tiny fraction of the money that otherwise goes to the “golden triangle” universities of Cambridge, Oxford and London.

Northern Gritstone is backed by many well-known pension and investment funds, including M&G and Columbia Threadneedle. He has £215m to invest and 140 opportunities have already been identified. …

Credit: www.thisismoney.co.uk /

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