How work with George Osborne to put Northern England on the global map has succeeded

Lord Jim O'Neil speaking at The Great Northern Conference 2019 at New Dock, Royal Armouries in Leeds. Picture Tony Johnson.

I have spent a whole career seeking to better understand how to achieve economic success. After growing up in Gatley in Manchester, I studied at the University of Sheffield before going on to work in investment banking, spending nearly two decades at Goldman Sachs as their Chief Economist. In that time, I’ve learnt a lot about what does – and doesn’t – support economic growth.

Ambition is key - whether that be the four once rapidly developing BRICs countries of Brazil, Russia, India and China, or here in the Northern Powerhouse.

Success does not happen in businesses or places that are unfocused or unclear about what they are seeking to achieve. The Northern Powerhouse, based as a concept on my previous work with the City Growth Commission, represented such an ambition.

Former Chancellor George Osborne and I as his Commercial Secretary at the Treasury used fiscal events - a unique opportunity for any Chancellor to exert their political will - to realise this ambition across government.

However, the strength of this ambition has ebbed and flowed since we left the Treasury.

Nearly a decade on, it’s true that we’ve made a good start on devolution but has the North got enough powers or share of national spending? No. Have we invested enough in transport, schools or skills? No.

There has been one notable exception – the mission to put the North on the world stage has been a resounding success. From the beginning, we wanted to showcase the very best of what we had to offer to international investors and, not long after George Osborne’s first Northern Powerhouse speech at the Power Hall in Manchester, he was on a plane with Northern civic leaders to bang the drum for the North around the world. It worked.

Indeed, I felt at one point that the Northern Powerhouse concept was better understood by investors in Asia, who recognised the ambitious vision of a global mega-city, than it was among politicians and financiers in London.

We’re now seeing the fruits of those labours in the foreign direct investment data. The Northern Powerhouse has overtaken London in its share of capital investment in recent years. This upsurge has been driven by the continued strong performance of Greater Manchester and amplified more recently by huge successes in neighbouring Cheshire and in the North East.

The government’s levelling up agenda needs to become far more serious in order to build on this momentum, putting economic credibility over political expediency. If the Chancellor is to achieve his 2.5 per cent growth target for the UK, we will need higher productivity overall - which means closing the North – South divide.

FDI has the power to make a meaningful contribution to the productivity challenge, and in the case of the North it is already happening. Devolution, specifically to improve skills and deliver on innovation, will be key.

I would like to acknowledge the support of HSBC and EY in informing the report with their insights, and to its authors in our staff team at NPP including Henri Murison, Tegan Massey and Andrew McPhillips.

This is a big moment for the Northern Powerhouse. Despite its doubters, it has started to work.

FDI is our first big win, now onto the next.

Lord Jim O’Neill is Vice Chair of the Northern Powerhouse Partnership and former Commercial Secretary to the Treasury.

How work with George Osborne to put Northern England on the global map has succeeded - Jim O'Neill