Lord Jim O’Neill, the former Goldman Sachs executive and Tory Treasury minister, has rejected a formal offer to join Andy Burnham’s government, dealing a blow to a Prime Minister already struggling to assemble credible economic counsel ahead of the Budget. Lord O’Neill rejects Burnham role not over policy but because he does not wish to place his assets in a blind trust, he told the Financial Times on Friday.
O’Neill had served as an informal economic adviser to Burnham before his election as Labour leader, and had been in talks to take on a key economic position in the new government. Those discussions have now ended. O’Neill told the FT that he enjoyed his current private-sector roles ‘too much’ to give them up, and pointed specifically to the blind-trust requirement for anyone holding 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,’ he said.
Lord O’Neill rejects Burnham role as adviser exodus widens
The decision is part of a broader pattern. O’Neill was one of three heavyweight economists reported to have been advising Burnham in the period just before he won the Makerfield seat. The other two, former Office for Budget Responsibility chair Richard Hughes and ex-Bank of England chief economist Richard Hughes, have also not joined the government in any official capacity, City AM reported earlier this month.
Minouche Shafik, the former Bank of England deputy governor, has also departed Number 10 as an economics adviser. The cumulative effect is a conspicuous gap in the economic teams surrounding both Burnham and Chancellor John Healey. John van Reenen and Anna Valero, who sat on an economics council advising the previous Chancellor Rachel Reeves, no longer hold roles in government either.
Neil Amin-Smith, a former adviser to Reeves in the Treasury, has been kept on as an economic adviser to Burnham, according to widespread reports. He represents one of the few threads of continuity from the previous economic team.
Budget pressures mount as advisory bench thins
The timing is awkward. Budget preparations are already well under way, with a two-month run-in placing Chancellor John Healey under intensifying pressure. The Iran war, slowing growth and fears of further interest rate rises are all crowding in simultaneously.
Several economists have said that while the £22.7bn fiscal headroom is likely to have eroded since March, Healey does not necessarily need to raise taxes to keep the public finances on track. But with spending commitments on the cost of living and calls for higher defence expenditure growing louder, tax rises to fund those measures remain a live possibility.
One Labour source told City AM they feared Burnham still needed significant economic hires to maintain credibility with markets and business. The concern is practical as much as political: with O’Neill gone and other senior economists either absent or unattached, the teams shaping Budget decisions are thinner than many in the party would like.
O’Neill’s own assessment of the government’s direction was warm, even as he stepped back from it. His support for the devolution agenda and his willingness to say so publicly suggests the door has not been slammed. Whether Burnham can persuade economists of comparable standing to take the blind-trust terms that O’Neill declined is the immediate question facing Number 10 as the HM Treasury counts down to Budget day.
