Close the talent gap to level up: what Jim O'Neill wants for England's north

Jim O’Neill – or to give him his correct title, Lord O’Neill of Gatley in Manchester – is in full flow.

Any day, O’Neill is expecting the government’s Levelling Up White Paper. “It was due 15 months ago,” he growls. “It’s been delayed three times.”

It's a subject that has taken up a decade of his political life in one form or other. It is also the big policy test facing the British Conservative Party as it seeks to show its majority hold on politics can last for a generation.

While he waits, O'Neill can talk. He’s shaking his head and speaking in unmistakeable, gravelly Mancunian tones. For once, he is not relaying tales of his beloved Manchester United – he was a director of the famous Red Devils and tried to buy them – his team since boyhood.

What’s occupying him today is “levelling up”. O’Neill, 64, is the former Goldman Sachs chief economist, internationally well known as the promoter of the acronym BRICs, to describe the influence of the new economic powers of Brazil, Russia, India, China, who went on to become a Treasury minister under Prime Minister David Cameron and Chancellor George Osborne. He’s concerned about another cause – one, like United, that is dear to his heart.

O’Neill grew up in Manchester. Nothing is a given, there. Clearly, he did phenomenally well, but he wants others to have the same life chances. And not just those growing up and living in Manchester, but across the entire, post-industrial North of England.

Currently, it’s thought to be held up pending an end to the government’s trauma over allegations of party-giving and rule-breaking. Ukraine is also increasingly dominating thoughts. So quite when the secretary of state responsible, Michael Gove, gets to reveal all remains soon, just not yet.

Which is a pity because the policy is of enormous significance. This was the promise after all, that got Boris Johnson elected, that swept him to power, demolishing Labour’s “Red Wall” of hitherto safe seats up North.

The powerhouse waits

Annoying as it is, O’Neill is used to waiting. “Look, the phrase is itself a derivative of something I helped champion, ‘northern powerhouse’. The fact it’s a derivative reflects the peculiarity of the ruling party. We’ve had three different leaders since we came up with northern powerhouse, and their stance on equality and levelling up varies in style, depending on how much they disliked their predecessor.”

The concept of northern powerhouse, tapping into all that dynamism and innovation that was lost with the decline in the North’s manufacturing and engineering base and providing a long overdue boost to regional communications and infrastructure, was pushed heavily by Osborne. Talking it up, bringing together national and local government to discuss and to try to solve the underlying weaknesses of this huge swath of the country in area and population became Osborne and O’Neill’s shtick.

But then Cameron fell from office and with him Osborne, and in came Theresa May. “With Theresa, it was ‘anything but northern powerhouse’ because she didn’t like George. With Boris, it’s a case of ‘we need to be doing stuff but we don’t like George Osborne either’ so therefore it’s called ‘levelling up’.”

The term, which has become a mantra for Johnson’s administration, has another attraction. “It’s very clever politics in an era of slightly lost capitalism. It’s the ruling Tory party stealing Labour’s clothes, about taking their hard-core policies to help those disadvantaged by capitalism. It’s clever.”

One issue he is looking to Gove’s paper to resolve is what precisely is meant by levelling up? While northern powerhouse was easily understood and clearly defined, this latest incarnation is wide. “It implies solving inequality, but inequality exists all over. If that’s what it means, the gap between the highest and lowest financially is big all over the country. There is poverty in Inner London. If someone says ‘Westminster City Council’ you immediately think of leafy squares and smart buildings, but their area includes estates that are not nice. Levelling up may be clever and palatable as a political slogan, but the detail of it is fraught with problems.”

Says O’Neill: “On one level let’s assume it should be about social mobility. OK, but I will never forget discovering that men in one district of Manchester had the same life expectancy as Russia. I was stunned, shocked. So, is levelling up about increasing male life expectancy? Is it fair to get elected on such a broad ticket?”

He does, though, have an idea of what it entails; what, if it was up to him, O’Neill would make it stand for. “What I think it covers is large parts of northern powerhouse and northern powerhouse-type initiatives.”

O’Neill laughs. “Boris even said ‘northern powerhouse’ at the beginning but he’s got to have a slogan that’s his, so he doesn’t say it any more.”

Johnson's reluctance

Crucial to delivery of levelling up, believes O’Neill, is greater involvement and increased powers for local politicians. It can’t be done from Westminster. This, though, creates a problem for Johnson. “He’s loath to come up with more mayors in big urban areas because he thinks they will support Labour.” O’Neill references the Mayor of Greater Manchester, hailed in some quarters as the ‘King of the North’. Johnson, he says, “doesn’t want any more Andy Burnham’s”.

Johnson’s reluctance is not unique. “Labour, when they were in control, had the same approach. They didn’t want to see power slipping away from the centre.” O'Neill smiles. “If it was left to me if we believe in this agenda, as the government we must forget tribal politics and not have any view as to who should be mayor, but just hope we get rewarded as the national party if we do the right thing. It’s ridiculous, how much of all this gets lost in tribal politics.”

So, what else, apart from more mayors, would be in Jim O’Neill’s Levelling Up White Paper? He would concentrate on “adult skills and how their development should be devolved. How can someone in Westminster have the slightest idea as to what is required, what works, in somewhere in Lancashire for example? Why do we assume that somewhere in Lancashire is the same as somewhere in Essex? They’re not, they’re entirely different”.

O’Neill would take adult training away from Whitehall and give it to local authorities to manage.

Next, “we’ve had 12 years of academies. It’s clear they’re not dealing with the education challenge in non-London parts of the country. Again, we have to involve elected mayors in the implementation of education policy for their area”.

We need what he terms "smart opportunity areas" in order “to solve the vicious burden of different generations within the same family having no prospects, no belief, in getting a proper job”. That involves, “giving money to the mayor of somewhere like Manchester – which has five of the worst neighbourhoods in Britain, incidentally – and letting them spend it wisely, as they see fit. They know their patch, not someone in Whitehall.”

Grounds for optimism

At present, the government is making grants to towns all over, to brighten them up and make them more viable. “It’s jam spreading to buy votes, too small and thin as to make a difference, it’s not levelling up.” He would restrict major investment to the cities and largest conurbations.

The HS2 fast-speed railway is going ahead, albeit without the eastern leg to Leeds and Sheffield. It’s costing a fortune, more than £100 billion ($133.8bn). O’Neill’s verdict? “Getting someone to Manchester a bit quicker is not levelling up. Politicians love big projects, that’s what HS2 is all about.”

The money would be better spent on improving cross-regional rail, road and bus routes, on cutting down the time it takes to travel between cities across the North and their satellite towns.

Too much focus, he maintains, is on physical transport. “I believe strongly that digital, non-physical transport, is pivotal. Bringing modern technology to the North, and the skills that go with it, is so important. It’s more important than HS2.”

What lies at the heart of this, along with belief, is cash. “If the prime Minister and the chancellor of the exchequer are not agreed about the big picture, how can you implement it?” He says: “Michael Gove has got more personal power than other ministers but if the Treasury won’t give him the money, what can he do?”

The Northern Powerhouse Partnership, the organisation he set up with Osborne as chair, remains. In fact, he says proudly, “membership is growing. It’s about creating more public-private partnerships, it’s almost becoming a mini-CBI of the North, attracting businesses whose focus is on the North”.

A major development, he says, is “the shift in regional house prices”. For 40 years, property values outside London have lagged the capital, they increased in London quicker than anywhere else. Not now. “That’s shifting. It frees up somebody, it allows them freedom of choice. It begins to raise the idea of ‘actually, I don’t have to spend my whole life in London'.”

The brain drain starts to reverse. O’Neill admits he is typical. “I came to London because all my mates were down here, it’s what you did. House prices are the cause of it and the consequence of it because you had no freedom. Once you’d bought in London, you couldn’t move home, move away, because you couldn’t afford to get back.”

Another trend is that society is becoming more conscious of division, about objectives such as profits with purpose. This too, gives him grounds for optimism. “Fairness will not disappear with Boris Johnson.”

Levelling up, he feels, may occur, “despite government. The genie is out of the bottle”.

There are grounds for optimism.

He’s hopeful in another direction. He’s got to go. Manchester United are playing and he’s got a ticket. There’s a spring in his step as he leaves.