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Lord O’Neill of Gatley: Lord Speaker’s Corner

12 June 2025

The US is just so obsessed about being big, it doesn't understand that by others becoming bigger, the US can become wealthier.’

Jim O’Neill, Lord O’Neill of Gatley, is an ex-Treasury Minister, former Chief Economist at Goldman Sachs and Crossbench member of the House of Lords.

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Lord Speaker:

Lord Jim O'Neill. Jim, welcome to Lord Speaker's podcast. Delighted to have you along. We know each other from the time of the financial crisis.

Lord O'Neill:

We sure do.

Lord Speaker:

So our acquaintance goes back quite a few years, but could you give me your backstory? You were born in Stockport in 1957, and you seem to me as if you've never left your roots despite being the chief economist of Goldman Sachs at one stage in your life.

Lord O'Neill:

Yeah, yeah. I'm very proud of my upbringing. Without boring your audience, I was actually born in a hospital in the centre of Manchester, St. Mary's, but I was raised in Gatley, hence Lord O'Neill of Gatley, which borders, or in those days bordered leafy Cheshire with tough Wythenshawe and, in fact, it's something that's only reflected on later years really, but the coincidence of that had a lot of influence on how I dealt with life, I think. We lived on a road that one side was Gatley Cheshire, the other side was South Manchester. And unless you had a lot of money or your parents were that inclined, we were on the side that meant we went to primary and junior school in Wythenshawe, which was a very tough council estate.

 And so from the very earliest of school age, I had to deal with a lot of people from very different backgrounds every day and I didn't realise it would influence me and maybe it's just in my mind, but I think it sort of allowed me to understand that there are very different people in life, even in circumstances where they can live very closely, and one has to sort of understand that as you go through life. And certainly when it comes to things that I developed later, specifically my interest in education philanthropy, I reflect back on those early school days. And indeed, coincidentally, I went to secondary school just as the comprehensive system came in, and I went to a comprehensive system school and there was a lot of kids that I thought were probably as bright, if not brighter, than I was, but they never quite had the right environment or circumstances to do anything with it. And I've always thought I've been very fortunate in that regard.

My mother and father also came from a very different background. My dad was a postman raised in the Centre of Manchester and my mum came from a Cheshire farming family, so they were very, very different. But my dad left school at 14. He was obsessed about the fact he missed out on his education and he put a lot of expectational pressure, almost bullied us I often thought, myself and my sisters into getting an education, and we were very fortunate in that way because many of the lads that I would play football with, they'd leave school as soon as they could, try and get a job and that was it. They never thought about education.

Lord Speaker  

And where did you go to university?

Lord O'Neill

So I went to Sheffield University just over the Pennines. My sort of idea was those hills in the middle meant it felt like being a very long way away, but if I needed to get home, especially to go and see United, one of my passions, it wasn't far. And I loved my time at Sheffield University. I'm still, some of my closest friends, even though we went off to very, very different walks of life for people I was at Sheffield with. But this October will be the 50th year that a lot of us started there and we're having a reunion in Sheffield to celebrate that.

Lord Speaker

Very good. Give us an idea of the path you've taken since university because it would maybe seem odd that you started off in the financial sector with Goldman Sachs from where you came from.

Lord O'Neill

I mean, yeah, I've been very, very fortunate. So when I went to university, I did it because my three older sisters all went and my dad kind of wanted me to, but I had no idea really what I wanted to do at all. I wanted to play football and have a good time and I did. In those days, I think life was a lot easier for those that were fortunate enough to get to a university, didn't have the same sort of pressure that one can observe on young people these days that go into higher education. And I didn't have any great ambitions. In fact, truth be told, I quite liked the university life and I kind of thought, "Well, I'll stretch this out for as long as I can." Being irresponsible and enjoying myself. And Jim Ford was the lecturer. Professor Jim Ford from Sheffield deserves a lot of credit for things that then happened because to my surprise, as not being the most diligent of students, he encouraged me to consider doing a PhD at the University of Surrey in Guildford, which at the time was, I think, only one of two universities, the other being, I think, Strathclyde that had an energy economic centre.

And I'd done a thesis in my masters at Sheffield about boring portfolio theory of how building societies supposedly behaved, which was so boring. But he said, "Why don't you try and apply that to the OPEC oil producers because you could get a research grant and do a PhD?" I thought, "That sounds good and another three years without getting a job, I'll do that." And it coincided with the second oil price crisis and towards the end of my PhD when what I say now seems kind of crazy compared to the uncertainties going on in the world. But at the time where it was very hard to figure out what was going on in the world with oil prices having risen already in the first crisis in the early 70s and then dramatically in the late 70s, I just sort of sent a CV around various places trying to explore getting a job. And by this time I'd built up a lot of debt, so I needed a job and-

Lord Speaker

A lot of debt enjoying yourself.

Lord O'Neill

A lot of debt enjoying myself is the truth of the... is the reality of what it was. But I needed to pay it off. And so I sent my CV around loads of places and the only ones that actually even responded were really banks in the City, particularly the American ones because of my background, important, I think, in a way how it influenced me. English employers, not being from Oxbridge, nah, but American banks, they naively thought because I'd done this thesis, I knew exactly what the OPEC countries were doing with the money, and that's what dragged me into working in the City. I remember half thinking Bank of America was the one that I went to, this is how uninformed I was at the time. I'm like, "Bank of America, is that like their central bank?" I was very, sort of, let's call it not focused on where my future was going.

Lord Speaker

Yeah, yeah, of course.

Lord O'Neill  

And I didn't feel at ease in the City when I first started, it seemed I thought it would be the real world as opposed to academia. And it all seemed a little bit strange to me at first. But I soon moved to another institution that was a specialist in foreign exchange advice and it had only about 30 of us working in it was called International Treasury Management and it was a very creative bunch and there was myself and one other guy, Paul Cherka, who were the economists, and I just sort of started to really enjoy myself. My job was to try and guess where the dollar was going to go, which I soon learned that virtually nobody's got a clue where the dollar's going-

Lord Speaker

It's still a contemporary issue.

Lord O'Neill

It is, very much so. I just wrote something about it last week. Still trying to kid myself I have any idea where the dollar's going. And I just sort of got into it. But I also had the bug of travel and this important influence on my family's life. Soon after I started that I moved to the first of two times to live in New York in the mid 80s and it really suited my personality and my background and famously people in New York don't really care about your background so long as you're sort of doing something and aspiring that's New York. And I really felt at ease in that environment.

Lord Speaker

Good. You've developed an influential voice, particularly at the time of the financial crisis, and it's still very relevant. And even a few days ago I listened to the Today Programme and you were on that programme and you've been on a number of podcasts as well, so it's great that I can have you here as well. But then you come into the House of Lords as a conservative peer. It sort of struck me as interesting. Explain that.

Lord O'Neill

It's very funny. I'll never forget, what is it now, nine years ago I joined the House and I'm still not entirely sure if I know the right ways at all how one should proceed and behave in the House. But I'll never forget my maiden speech and the Labour opposition beautifully teased me straight away about exactly the same. And quite a lot of them who I'm friends with knew me as a big Manchester United fan and the first thing they said in response to my maiden speech was, "We always thought of you as being a red," Manchester United colours as well. And I couldn't stop laughing, which I don't think was the thing one should do, but it was very funny.

 And it was odd. I've never had very strong political ideology, but a lot of people would observe things that I would say, even though I'd worked for Goldman Sachs for 18 and a half, 19 years as though if anything I'd be left of centre and I think it's reasonably well known when Gordon Brown was becoming Prime Minister, he tried to persuade me to do something with him. So it was odd, but at the core of it, which really goes as to how I have thought since and why it's very nice being a Crossbencher since I've stepped down as a minister.

I am sort of eager to see the right thing done, whether what I think is the right thing is the right thing is another matter, but I don't really care that much about the political ideology in that sense. Maybe I might be regarded as a sort of centrist, whatever that might mean. But the thing that dragged me in was the Northern Powerhouse and it linked to my Manchester roots and David Cameron and George Osborne had effectively adopted many of the ideas that somebody called the City's Growth Commission that I'd chaired.

Lord Speaker

That was 2013.

Lord O'Neill

The first thing I did since I left Goldman and I got this call out of the blue saying, "We want you to come and implement the Northern Powerhouse." And I nearly said no because I wasn't sure I wanted to be connected with one particular party. I was unsure about the whole Westminster, Whitehall thing, but my wife actually said to me that, "If you said no and they found somebody else, you're probably always going to think 'I would've done it X, Y and Z,' and you probably would've regretted it." And so that's what happened and I have no regrets even though I only stayed around as a minister for 18 months, but that's why I joined.

Lord Speaker

Okay. Just quickly, can I take you on to your life in the Treasury as the Treasury Minister?

Lord O'Neill

Yeah, yeah, yeah.

Lord Speaker

Coming in with a bagful of experience. There is a view that Downing Street, for example, is under-resourced that-

Lord O'Neill

Absolutely, yeah.

Lord Speaker

... it is creaking, that it doesn't have a grip on Whitehall and the Treasury is resistant to spending money, for example, the Levelling-up Bill, which has been said in the newspapers that the Prime Minister at the time, Rishi Sunak, didn't fund as a result. Now your desire for devolution will take it forward with the Northern Powerhouse and the cities commission. Your desire for devolution would seem to me to require a different architecture in Whitehall and a different cultural relationship with what we would call the regions.

Lord O'Neill

I've got slightly contradictory views about central aspects of this, but let me try and explain how I feel. There is this perception around the treasury officials and experienced ones who will just quash anything that smells of spending money that is harder to be accounted for. And I'm not sure that that's really true. And from my experience, it depends on the determination of the chancellor and the Prime Minister and how close they think together. And it goes back to why I agreed to join.

 I quizzed George Osborne as to how serious the Northern Powerhouse thing was in his mind and I liked his answers and it seemed to me that was probably a top-five policy priority. And one can look back and question how could it be if they were chopping local authority spending? That's an issue for discussion. But what was clear to me is they fed that behavioural thinking into the mindset of people in Treasury. And so when I was there, a devolution team was set up, which I don't think existed before in Treasury, and you could tell that the ambitious younger Treasury civil servants wanted to be in the areas where the action was happening. So I'm not entirely sure, and this is pretty valid to Rachel Reeves today and Keir as Prime Minister because I think they've said some very good things about certain issues. But I think really, really making sure that people that they need to influence to deliver by constantly focusing on these issues is the way to translate it into people's minds and indeed the whole country's population.

 And here's the contradictory part, take it to the other extreme. And some people outside the world of economics and finance have started to influence me more very recently about this, including Thomas Heatherwick, the great young architect.

Lord Speaker

Yep.

Lord O'Neill

Out of the blue we met recently, he said to me, we never met before, never spoke, he said, "I have this crazy idea about making Manchester the second city of the country and it being a national priority." I said, "You're right." And I think if you really think about how the Britain and the England of the past 100 years have developed, we are ridiculously dependent on London and the Southeast.

Lord Speaker

Absolutely.

Lord O'Neill   

And what is interesting about the randomness of Thomas saying that to me is because of what's already happened a bit with devolution, Greater Manchester over the balance of the past 20 years has actually done pretty well. It's actually outgrown London quite a bit.

Lord Speaker

Yeah, I think you would say it's the centre of Manchester that's done that, not the boroughs.

Lord O'Neill

Well, what is surprising is that that actually isn't now true. Manchester itself has done pretty well, but the limited data we've got, and as somebody that spends a lot of time there, you can feel it anecdotally.

Lord Speaker

But you did say that in 2015, 16.

Lord O'Neill

I did say it. I did say it. And I used to say it to my now sadly, departed pal Howard Bernstein quite often and to Richard Leese, who I teasingly call the Manchester Mafia. That appeared to be the evidence in 2016. But in the data that we now have as the ONS has started to publish more and more data about productivity and growth by borough, to my surprise, it shows that since 2013, growth in Greater Manchester has risen slightly more than Manchester itself. And there's a couple of reasons I think why now, in hindsight it's obvious, as the responsibility for local transport has shifted more to Greater Manchester and the tram network has spread out to some of the boroughs, that's made it a lot easier for people to move around in the same way that people in London frankly take for granted. And secondly, with that, people can move around for work more easily and one has to be careful about this because the absolute base of growth and living standards is still very low.

Lord Speaker

Yeah, of course, of course.

Lord O'Neill

But that has started to improve and very few people, as evidenced by your question, have the slightest idea that this has been happening. But it's factually true, and I think a national policymaker should think about how do we make this even bigger? And not just Greater Manchester. How do we do the same-

Lord Speaker

Well, you have said, if I could say-

Lord O'Neill

... for West Midlands or Glasgow or-

Lord Speaker

Yeah, but on your area in Centre Manchester to any of Liverpool, Leeds or Sheffield, it's a shorter distance than the central line in London. It's a conurbation of eight million people. So how do you satisfy that greater devolution ambition given Jim that you've also laid down about half a dozen points that one needs to look at for proper devolution, what you said that the tax raising and spending powers for the area big, big issue given the centralised system we have here? The infrastructure, transport and digital education, which is a passion of yours, but primary and secondary education, which you focused on skills and, if you like, a genuine level of ambition. And that attracted me because I was being brought up in the same type of area and what happened in the past is pretty good, but it wasn't really very good.

Lord O'Neill

Right.

Lord Speaker

And how do we make it a new future for yourselves? I suppose that's what you're getting at in that particular area and also private sector involvement. Now that's a huge, huge agenda, Jim. So how do you start making your way through that and what would be your timescale for it?

Lord O'Neill

So on that last question or that last two, I remember being quizzed in a big conference many years ago by the one and only John Humphrys when he was still on the Today programme about how would I measure success of the Northern Powerhouse. And my answer related to something on education, and you and I had chatted about it off-air that 20 years back I went to a school in North Manchester that had won a prize that I'd set up for the best in Blackley.

Lord Speaker

Completely. Yeah, that's right.

Lord O'Neill

Four miles from Old Trafford, three miles from the centre of Manchester. And the male life expectancy I found out there, amazingly, lower than Russia, which is notorious for having dreadful male life expectancy. And so my answer to John Humphrys was-

Lord Speaker

But none of the guys who supported Manchester United in the class, mostly white you said?

Lord O'Neill

Yeah, white working class,

Lord Speaker

They were all that. But hardly anyone had ever been to Old Trafford.

Lord O'Neill

Virtually no one had ever been to Old Trafford. I sent a message to the then chief exec, David Gill, the following day and said, "You've got to do something about things like this. You've got people coming from all over the world to Old Trafford, but these young kids who are all United fans three miles away, never been." But my answer to John Humphrys was about that. I said, "John, my answer is if I go back there in 25 years, if I'm still alive, and the male life expectancy is still as low as it is, it will have failed." Because it's about people, right? Ultimately that's what it's about.

But there are many, many things. I often have said there are six ingredients for the success of the Northern Powerhouse. The last one is more oomph. And to really connect all these things that you asked me together, you need to have a belief from civic leaders, from local authority leaders, from the people on how they're sold this story and link in with them to create, let's call it a buzz. You need to have a buzz and a hope that this is real as opposed to just some gimmick to sort of pacify these people for the decline of manufacturing and the decline of whatever else has declined. And I think it's doable. And to Howard and Richard and others credit, including private sets of people, you've actually got that a bit in Manchester these days.

And the key ingredient is people here need to have excitement about giving responsibility to local people in these places to make a national difference. And I try to show that if you could have say three or four other places, West Midlands, Northeast, probably West Yorkshire and two or three other, the smaller ones, but they're the big ones, if they all could be doing the same as Greater Manchester has done and Manchester carries on doing the same, the national growth performance of the UK, the trend rate of growth would rise by 0.2, 0.3%.

Lord Speaker

As a Scot, would that apply to Glasgow?

Lord O'Neill

Yeah, I would include Glasgow. I've not been to Glasgow an enormous number of times, but I have been there for-

Lord Speaker

But you did mention to me about the chief executive of Glasgow, maybe you can-

Lord O'Neill

When we started off the City's growth commission, we looked at any urban place with 500,000 people or more, and there was 13 in the UK, including Glasgow. And so we went there and in each of them we'd do these interviews with key people locally. And I'll never forget the then chief executive of Glasgow saying, "Don't talk to me about devolution. We don't have any effing devolution." And I thought it was very-

Lord Speaker

Curt.

Lord O'Neill

It was very, very intriguing, and I like to walk a lot when I can, and I remember wondering around Glasgow, and it's a substantive place.

Lord Speaker

Absolutely.

Lord O'Neill

And it's substantive enough that if it's got its own buzz going and various things kicking in together, obviously Glasgow would be a place that could make a difference to the national growth performance. So yeah, I'd definitely include Glasgow.

Lord Speaker

Good. Okay. Then let's finish on devolution by an imaginary scenario that the Prime Minister and the Chancellor invite you in to number 10, just you. "Jim, you've got your ambitions for devolution, your identity in Manchester is second to none. You want to revitalise the region, what do we do? How do we work with you? What are the things we've got to change?"

Lord O'Neill

So there's some easy things that have partially had the door opened. I think adult skills, education issues and adult skills, completely devolve them. How can-

Lord Speaker

You've called the Department of Education dreadful.

Lord O'Neill

Yeah. I mean, how can people, as well-intentioned as they may be sitting here in Whitehall, have the slightest idea about what's really needed in these local areas? When you stop to think about it, it's virtually impossible. And with it you can't apply the same sort of conceptual framework that's going to apply in all these different places. So just get rid of it and get rid of that part of those responsibilities in the Department of Education. And I guess it would be also the Department of Business to some degree. So that would be the first thing.

 Second thing, which is very topical in the spending review, which, I guess, will be about a month after our chat is public, I think there's a serious case for exploring devolving aspects of the welfare support budget as it links to critical health illness, and at the centre of it, so-called worklessness. If you look at one of our huge national issues since COVID, what is it, 900,000 people have left the workforce. Enormous problem for our economic growth. Growth depends on the number of people that work and the productivity and we've lost nearly a million. And if you delve into that, a very large number of them are in northern cities and the Midlands. So why not consider devolving parts of that and linking them together? How can local authorities still support social care if they can't deal with any of these things? And how can people down here have a clue how to approach that in Birmingham, say compared to Liverpool? And so I would love to see significant bits of that being devolved.

 And people watching or listening probably think, "Well, how on Earth do you fund that? Is it just the taxpayer?" The answer is not necessarily a national centre. And, again, off-air, you asked this to me, I've lived in the States twice that's, despite what's currently going on, generally been a successful place. But what is interesting to me in this regard is there's a lot of ability to raise or not raise local taxes. And when I mention that to policymakers here, they think I'm bonkers. And the only reason they think I'm bonkers is because it's never happened. But because it's never happened, why does that mean it shouldn't happen? And I think we should have these kind of ambitions, particularly because the tiptoeing towards bits of devolution that have happened seems to be in some places working.

Lord Speaker

in terms of the fiscal rules, you've mentioned that the second fiscal rule borrow to invest, the government needs to get on with that element. And if you like, the scenario that could come across is that we have the fiscal rules, therefore we're constrained in what we can spend. But you have suggested a more imaginative way of the quantitative tightening dealt with by the US and Euro, which could release billions of pounds. You've also spoken about war bonds for defence spending. So give us an idea, imagine a different scenario and explain that to us because the answer would be, look, these things can't be done because we're tied down by their fiscal rules. But you want the fiscal rules changed.

Lord O'Neill

Well, I'm a big admirer of what the Chancellor did on changing her fiscal framework. But I get frustrated by the fact that eight months into this government, the second part of the fiscal rule hasn't been used or challenged. And as far as I understand, the framework from the last Conservative government was changed in order to borrow to invest in things that are going to boost growth. And I don't know whether it's because of this weird 24/7 world with the media that they've got stuck into and the obsession with the narrowness of fiscal rules. But we're into this sort of thing where every three months does the Chancellor have to have some new mini budget in order to find 10 billion to sit within a rule?

Which is kind of bonkers because the second part shouldn't be affected by any of that. And I think they have to be more serious about that or get rid of it. Because from what I understand, and I talked to them quite a lot about it beforehand, that rule allows them to, for the first time in my adult, and I'm interested in your response to this, John, the first time in my adult lifetime, we will get an infrastructure strategy where transparently to the country it will be shown whether project X has big positive effects or not. Think about when you sit back, whether it be Heathrow, Hinkley Point, HS2, I jokingly sometimes say anything with an H, Hammersmith bridge, we never see from any independent body whether doing something better with them is going to have any benefit or not. We just get fed sort of leaked things in the media or the insiders say, of course, but they've creating a body, NISTA merging the infrastructure commission and the infrastructure project authority to show all of this.

 And in my very passionate views, the ones that have big positive multipliers as economists would call it, then you borrow money and you build them. And that will help also boost the trend rate of growth. And that's how we begin to get out of this multi-decade problem where-

Lord Speaker

Longstanding problem.

Lord O'Neill

... we can never do anything because somebody's always got a reason why it should be stopped once it starts. It's bonkers.

Lord Speaker

In the borrow to invest, I'm interested in it from the devolution perspective, Jim. Do you think that needs to apply at local level?

Lord O'Neill

In my very early days in finance, and again, you'd know this, we used to have local authority bond markets.

Lord Speaker

We did.

Lord O'Neill

They don't exist anymore. So again, in principle, once we get more time with the mayoral authority model showing some kind of success and support, why not? And the crucial part of making some of these northern cities connect is what you might call now a northern version of the Elizabeth Line, which seems to work so fantastically in London. Why could you not have some money from central government, the new National Wealth Fund and local metropolitan areas all trying to fund that together? Why could we not do that? The real answer is because it's something we've never done before, but why not?

Lord Speaker

You've got a reputation, rightly deserved, for global economics and looking around the world and that. And you introduced the concept of BRICS, that which Brazil, Russia, India, China, South Africa, and held out high hopes for it. But I read a 2021 article in the Financial Times 10 years after it where you said you were disappointed by that, maybe disappointed in the BRIC countries themselves, but also the G20 and the UN and World Bank not getting behind it. What power or possible power do these BRIC countries have yet in the global economy, given that 85% of the global economy is outwith America?

Lord O'Neill

So this is a hugely valid issue with our friend Mr. Trump at the moment. If you look back, I created this acronym just after 9/11. In fact, it was 9/11-

Lord Speaker

It was 2011, wasn't it?

Lord O'Neill

2001.

Lord Speaker

Sorry, 2001.

Lord O'Neill

Yeah, yeah. So we're coming up to 25 years. And if I look back at the world economy since then, 55% of all the growth that the world has seen has come from the US and China. And unless we want to go back to how we were in the 90s, we can't kid ourselves that because one part of the world is an unelected regime and the other one, at least until the past few months, was seen as the leader of the rest of us. We can't kid ourselves that we can go back to that without a lot of pain. And so the path in which Trump seems to have embarked on of aggressive confrontation, I think, is not likely to be sustained because it is in America's interests for China to continue to do well economically. And I'm worried that a lot of American intellectuals, particularly to the right of centre, don't accept that. And there's something in the human psychology where the US is just so obsessed about being big it doesn't understand that by others becoming bigger, the US can become wealthier.

 So against that background, let me talk more a bit about the BRICS. So 25 years on China and India have been huge successes economically, Russia and Brazil have not. They had a fantastic first decade, but since around 2012, both of them for different reasons, although there is a commonality of being too dependent on commodities, have been really disappointing. On top of that, as a political group, they don't function. What they're really good at is collective symbolism and it is ironic given that we now appear to have a US president that also wants to dismantle the post-war global system because in essence what the BRICS countries keep trying to point out is the global system isn't fair because it doesn't include what's become known as the global south. And they're right. But they don't really go around trying to take more responsibility to help make it better.

But I believe that if Trump either chooses or is more deeply supported by the American population that they're going to force through some big changes whether us in Europe and elsewhere like it or not. That might force other parts of the world to do things differently that they'd been thinking and that could result in some big changes in China and it sounds crazy to say it today, it could result in some big changes in Russia. For good reason, it's very fashionable today to think of Russia being an absolute disaster and a nightmare. But when I dreamt up the BRICS concept, you remember, the G7 had become G8.

Lord Speaker

Absolutely.

Lord O'Neill

Everybody loved Russia. And so it's not impossible for a world where Russia is actually more part of trying to share common global improvement as opposed to this sort of constant adversity, how we think about it today and I like to think I can keep an open mind about this partly because I had the incredible benefit, especially during my time at Goldman, of travelling to a lot of these places frequently.

Lord Speaker

So you're saying there could be an opportunity for these countries with the dislocation that's taking place at the moment in the longer term perhaps?

Lord O'Neill

Maybe even sooner. One thing, having lived through many big global crises or financial and economic ones, is I early on became a believer of the phrase, never let a crisis go to waste. Now, some people and some countries actually quite often do let the crisis go to waste, but the really focused and sensible people and countries don't. And so yeah, I think there is a chance for some good to come out of this chaos.

Lord Speaker

Thomas Friedman at the New York Times made a recent visit to China and he came back with the stark phrase it was 'screwed' because China is a real global player now, particularly in the digital markets. But it's also responsible, at the moment, for about a third of all global products. And by 2030 they're saying that that's 45%. And when President Xi came in, in 2012, it suggested that he had a long-term strategy to make China dominant and people would say that he's made it dominant in the digital world, in the cyber world on issues such as that. And in terms of robots, electric batteries, aerospace, solar power, autonomous cars, EVs, China is really up there. So any dislocation will be perhaps to the detriment of China, but it could be to the detriment of America, and Friedman made the point that given they are the two superpowers, they really need for the future of humanity to work together.

Lord O'Neill

Oh, I'm definitely with Tom Friedman on his last point. Going back to what I said earlier, more than half of all the world growth, including indirectly that we've had, has come from the US and China. So if these guys are going to be kicking lumps out of each other, it's going to negatively affect everybody. And it goes without saying, in my opinion, you can't solve climate change, you can't solve antibiotic or antimicrobial resistance or any of these-

Lord Speaker

 

Lord O'Neill

... truly, truly global things without those two countries. And it is as simple as that. And yes, it might be politically easy to try and explain to your own people that all your problems are because of this evil place in some other part of the world, and the Chinese do that about the US and the US does that about China. But it's ridiculous and it doesn't make sense. The most iconic global company of this generation, Apple, everybody spends half their day on a blinking Apple product

Lord Speaker

Too much.

Lord O'Neill

Yeah. It gets most of its inputs from China. But importantly I think its second-biggest sales market is China and that's the reality. And yes, the politics of playing on your own weaknesses to blame it on others has some short-term appeal, but it's not a recipe for lasting success. So in that sense, Tom is right. But let me throw in one of the things that I... I read that piece, and one of the thing that I think Tom missed.

I don't think China wants to run the world. China's ambition is to make all their people prosperous. And because China's 1.3 billion people, that is what, 15 to 20% of the world?

Lord Speaker  

Yeah, yeah.

Lord O'Neill  

But that's what their ambition is. And I think one of the many dilemmas about the world post-BRICS and the world we're in is that the US does want to set the standards or did want to set the standards for the rest of the world. And so everybody automatically assumes the next big guy is going to want to do the same. But I don't think that's true. I think the Chinese leadership wants to do the best it can for Chinese people and it will try to influence the rest of the world that they perceive as being directly relevant to their internal interests. But I don't think they have the same global ambition that I often hear others talk about.

Lord Speaker

Yep. On that, Freedman, if you remember back to an article he mentioned visiting a car factory, a new car factory and saw the designer 3D model a car and they tested it in conditions of rain, desert, forest, and beach. Now the designer said it took them previously three months to do that, but with an open source 3D, it took three hours.

Lord O'Neill  

Good God.

Lord Speaker   

So the pace of change-

Lord O'Neill   

Unbelievable.

Lord Speaker   

... is absolutely enormous-

Lord O'Neill   

It's scary.

Lord Speaker   

... and it would seem that China is a bit of a cashless society now. I mean, Freedman made the point, and that's not to undermine anything, but he said, "Even some of the people who are begging in China have got a QR code." But I don't want to make fun of that, but it just gives you an idea that cash-

Lord O'Neill   

It's a symbolic point, yeah, yeah. I mean, such is the way of the changing world.

Lord Speaker   

But your visits, would you agree with the position that China's in at the moment in terms of the cyber world and digital?

Lord O'Neill   

I have not been as much recently as I used to go. I've been in China over 30 times in my life, not much recently, and it always struck me that the speed at which they adapt and change is incredible. And certainly I think this is a generally positive attribute of a lot of Asian countries that I've travelled to. I always think of South Korea as being particularly adept at technology for everyone. And I remember being in some quite remote places in many Asian countries, but including China, where they have absolutely no problems in accessing the internet. And even today, as you'd know as well, if not better than me, you can sometimes walk 200 yards away from your office outside Parliament and you can't get a signal.

Lord Speaker   

Sometimes in Parliament by the way.

Lord O'Neill   

Sometimes in Parliament. And I think that is an underappreciated thing that Asian societies do seemingly really well. And as we all become more and more locked into advancing technologies and AI, it would seem to me there is a natural social advantage, let's call it, that a lot of Asian societies probably have got that we haven't because we're still struggling with making sure all this stuff is available to everybody and it's not just harnessed by the elite, which I think is some ways linked to the underlying dilemmas about what's going on in the States today.

Lord Speaker   

Let me take you onto a huge question in terms of the sort of existential questions for humanity. For example, AI, the speed of development of AI, how do we manage AI? Because there's definitely going to be winners and losers as a result of that. Climate change, how do we approach that? And you've got your own ideas now, which I'd really be interested to hear, and given the disruption that's going to take place with the speed of AI, the capacity for failed states and how we deal with disorder. So could you address those points?

Lord O'Neill   

I have no idea [laughter].

Lord Speaker   

Okay. Well let me take... But AI, have you any idea-

Lord O'Neill   

I've got views. I have got views. I think first of all-

Lord Speaker   

You're not coming in here to say you have no idea of an answer.

Lord O'Neill   

I'm leaving now [laughter]. So the first part probably is very unhelpful. I'm an economist by training for good and bad. But throughout my career there has been waves of time where people have said automation is bad for people. Auto industry is one that I often think about, which, of course, has gone through an enormous amount of automation in some of the best places. And at least until we chose to leave the EU, the success of the British-based auto industry, even though there weren't many British-owned companies, had become quite remarkable in terms of manufacturing productivity. So I certainly don't buy this often popularised idea that dramatic growth of AI means none of us are going to ever have a job.

Lord Speaker   

Of course not.

Lord O'Neill   

I don't buy that at all. The second thing to say, and it's because of my involvement in aspects of health issues and to some degree education. I think AI, if correctly guided and regulatory policy thought about really smartly can be enormously positive.

Lord Speaker   

And we need a global framework.

Lord O'Neill   

We probably need a global framework, which currently at the moment would be very hard to pull off. But we also need a very savvy, and again, given your background, especially your time in the Treasury select committee, you'd be able to think about this issue. We have to be careful to not confuse more regulation with better regulation, which is easy to say, but very hard to do.

Lord O'Neill   

But I think of our own productivity problems, and if you really delve into the data, it's become extremely problematic in the NHS, in social care and in big, big public sectors. I think productivity is actually something like 10 to 15% lower than a decade ago in the health system. How can we want to keep putting more and more money into something that has that low productivity? And it seems pretty clear to me that very smart application of AI could cause enormous, enormous productivity improvements in our health system and in our local authority, social care, which in turn would take enormous pressure off the public finances.

 And so I see the optimistic path as being substantial where my final point is the however, I think we do need to make sure that going back to where you and I met and the core of it, arguably, was this idea that just let the financial sector regulate itself and there'd be no problem. That didn't turn out too well, did it? And there's a lot of these AI guys are wanting to do the same. And I think we cannot allow that to happen because they have very defined interests in their business and their wealth growing from it. Whereas you have to internalise instead of externalise the issues. And so we have to be really careful about making sure the incentives for the smart creators are the right ones instead of just the ones that they want.

Lord Speaker   

Let me take you onto the antimicrobial resistance.

Lord O'Neill   

Yes.

Lord Speaker   

Now, Surprisingly, you were appointed chair by David Cameron over health economists, which I applaud by the way on that. But the drug-resistant infections responsible for say 50,000 deaths a year in the UK, but globally, 700,000 with drug-resistant, whether we're talking about malaria, HIV or TB as a result,

Lord O'Neill   

Huge.

Lord Speaker   

And you made a number of recommendations there. Can you illustrate what your view was on that and maybe the dangers presently if we're not taking this seriously?

Lord O'Neill   

Yeah, so I mean it was really weird. When I got asked if I'd consider doing it, I couldn't even pronounce antimicrobial resistance.

 

Lord Speaker   

I thought I tried a good job there.

 

Lord O'Neill   

You did pretty good and thank God it abbreviates to AMR. But it soon turned out that it was fascinating as an economist and somebody with a financial background in it, to think about the complexity of the conflicting issues is hugely analytically interesting. And I often say, and I believe it's still the case today, so far it's the most interesting thing I've ever done in my life for many, many reasons. But at the core of it is a massive, massive, truly global problem. It doesn't matter whether you're a woman or a man, Black or white, Sunni, Shiites, we all 8 billion of us are vulnerable to antimicrobial resistance. And at its core, I believe we need to stop treating antibiotics like sweets. And most of our recommendations focused on demand reducing interventions and supply boosting ones and supply boosting ones are about getting more new drugs, getting vaccines used for health prevention in animals especially so you wouldn't need so many drugs, et cetera, et cetera, et cetera.

I believe, and this goes back partly to the AI issue we talked about on health more broadly, we need to distinguish between those that do need antibiotics. And in many parts of the emerging world, the problem is no access at all, but we need to make sure they get them. But we need to stop all these millions of people all over the world, probably about 20% at least of the people that get them, don't need them. And so we need to get rid of that and permanently reduce the demand. And at the core of it, in this world where technology and AI is becoming so dominant, we need to have affordable state-of-the-art diagnostics. So when you, you've got, I don't know, a sore throat or an ear infection and you pester your GP and because they're so busy and they're sick to death of so many people, they know they've got to see, they just straight away write your prescription.

Lord O'Neill   

We've got to stop that. And I was shocked when I first started this work that like everybody you have this enormous respect for your GP, you think they are the most important people in the world and they get everything right. But then when I thought about this, they just like a foreign exchange person guesses where the dollar's going to go, these guys guess whether you need an antibiotic or not, it's crazy because slowly the drug resistance goes up and up and whether things like gonorrhoea, neonatal sepsis are all becoming increasingly areas where the drugs won't work and if we don't do something about it, all modern forms of surgery in our lives will cease to be able to be conducted. So it's a huge problem and we've got to somehow without scaring our people deal more seriously with it in our own countries and collectively.

 I think on what's happened since our review, actually the UK, despite the chaos that's gone on politically, has actually done a reasonably good job. In terms of initiatives for new antibiotics, the UK is probably the leading country on trying to pioneer something that's called a sort of Netflix model where they're sort of trialling buying in bulk and for a limited amount of usage. And in agriculture, the UK adopted our target and actually achieved what we recommended every country should do. But at the end of the day, if the rest of the world doesn't try and do the same, we're still going to be affected by it badly. But it's hugely important, and I'm actually getting back involved in it, I'm going to chair an initiative about trying to create an incentive system for the right diagnostics to apply to neonatal sepsis because there you can identify very clearly the very worrying number of young or newborn kids that end up losing their lives because they haven't been diagnosed or the parents haven't been or the mothers haven't been.

Lord Speaker   

Well Jim, that was a fascinating conversation. We could go on for quite a time yet, but I've got a final question for you.

Lord O'Neill   

This sounds troubling.

Lord Speaker   

No, not at all. I was raised on the north bank of the River Clyde and on the opposite bank, one guy was brought up in Govan, mainly an Alex Ferguson. Now given you are fanatical for Manchester United, when is a future Manchester United manager going to replicate the success that he's had-

Lord O'Neill   

Oh, my God.

Lord Speaker   

... or are you just going to let the Scots predominate

Lord O'Neill   

Amongst the many, many fortunate things in my life is that I'd like to regard myself as a friend of Alex's. I actually had lunch with him in South Manchester two weeks ago and the guy remains a true, true, true legend and quite how he managed to cope for the last eight years of his amazing success under the ownership that is the source of United's problems I have no idea. But Alex is a genius and God bless him. We need a new Alex. That is for sure.

Lord Speaker   

I see you've dodged the question, answer the question.

Lord O'Neill   

I quite like the current manager, but the problem with the way... I'm going to contradict myself. I've been so long a United fan. I remember when we actually got relegated and some of my greatest memories as a fan was actually that brief period. Whether it was because I felt confidently we were coming back to be a big success or not, I don't know. But my point is Manchester United have no right to persistent success. And in fact, we could do a whole podcast on this. In fact, if you look over the whole history of United, we only won the league twice outside Sir Matt Busby and Sir Alex Ferguson.

Lord Speaker   

Two Scots.

Lord O'Neill   

Two Scots.

Lord Speaker   

Well, there we are.

Lord O'Neill   

So maybe the answer is we need to find another Scots manager

Lord Speaker   

Okay, for me a good note to end there.

Lord O'Neill    :

Maybe something for you to do when you step down from this position.

Lord Speaker   

Thank you very much, Jim. That was fascinating. I'm really privileged that you came along.

Lord O'Neill   

Listen, listen, I'm so honoured and shocked that you'd asked me to do it and-

Lord Speaker   

No problem.

Lord O'Neill   

... it's very, very kind of you. Thank you.

 

In this episode

In this latest episode of Lord Speaker’s Corner, Lord O’Neill shares his perspectives with Lord McFall of Alcluith on a range of topics, from China and the USA to AI, the risks of rising antimicrobial resistance and why Manchester should be prioritised as Britain’s second city.

At Goldman Sachs, Lord O’Neill coined the term BRIC (Brazil, Russia, India, China) to describe the group of emerging economies. In this episode he shares his thoughts on how that has progressed, as well as President Donald Trump’s current tariffs approach by the US. He explains ‘the path which Trump seems to have embarked on, of aggressive confrontation, is not likely to be sustained because it is in America's interests for China to continue to do well economically.’

He also shares his thoughts on the current approach to AI, warning against letting tech sectors self-regulate: ‘this idea that just let the financial sector regulate itself and there'd be no problem…that didn't turn out too well, did it? And there's a lot of these AI guys wanting to do the same.’ 

Lord O’Neill also calls for greater devolution, with powers for regions to raise local taxes, suggesting ‘people here (in Westminster) need to have excitement about giving responsibility to local people in these places to make a national difference.’ He also calls for devolution on welfare-spending with health-linked budgets for local authorities: ‘There's a serious case for exploring devolving aspects of the welfare support budget as it links to critical health illness’

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Transcript

Lord Speaker

Lord Jim O'Neill. Jim, welcome to Lord Speaker's podcast. Delighted to have you along. We know each other from the time of the financial crisis.

Lord O'Neill

We sure do.

Lord Speaker

So our acquaintance goes back quite a few years, but could you give me your backstory? You were born in Stockport in 1957, and you seem to me as if you've never left your roots despite being the chief economist of Goldman Sachs at one stage in your life.

Lord O'Neill

Yeah, yeah. I'm very proud of my upbringing. Without boring your audience, I was actually born in a hospital in the centre of Manchester, St. Mary's, but I was raised in Gatley, hence Lord O'Neill of Gatley, which borders, or in those days bordered leafy Cheshire with tough Wythenshawe and, in fact, it's something that's only reflected on later years really, but the coincidence of that had a lot of influence on how I dealt with life, I think. We lived on a road that one side was Gatley Cheshire, the other side was South Manchester. And unless you had a lot of money or your parents were that inclined, we were on the side that meant we went to primary and junior school in Wythenshawe, which was a very tough council estate.

 And so from the very earliest of school age, I had to deal with a lot of people from very different backgrounds every day and I didn't realise it would influence me and maybe it's just in my mind, but I think it sort of allowed me to understand that there are very different people in life, even in circumstances where they can live very closely, and one has to sort of understand that as you go through life. And certainly when it comes to things that I developed later, specifically my interest in education philanthropy, I reflect back on those early school days. And indeed, coincidentally, I went to secondary school just as the comprehensive system came in, and I went to a comprehensive system school and there was a lot of kids that I thought were probably as bright, if not brighter, than I was, but they never quite had the right environment or circumstances to do anything with it. And I've always thought I've been very fortunate in that regard.

My mother and father also came from a very different background. My dad was a postman raised in the Centre of Manchester and my mum came from a Cheshire farming family, so they were very, very different. But my dad left school at 14. He was obsessed about the fact he missed out on his education and he put a lot of expectational pressure, almost bullied us I often thought, myself and my sisters into getting an education, and we were very fortunate in that way because many of the lads that I would play football with, they'd leave school as soon as they could, try and get a job and that was it. They never thought about education.

Lord Speaker  

And where did you go to university?

Lord O'Neill

So I went to Sheffield University just over the Pennines. My sort of idea was those hills in the middle meant it felt like being a very long way away, but if I needed to get home, especially to go and see United, one of my passions, it wasn't far. And I loved my time at Sheffield University. I'm still, some of my closest friends, even though we went off to very, very different walks of life for people I was at Sheffield with. But this October will be the 50th year that a lot of us started there and we're having a reunion in Sheffield to celebrate that.

Lord Speaker

Very good. Give us an idea of the path you've taken since university because it would maybe seem odd that you started off in the financial sector with Goldman Sachs from where you came from.

Lord O'Neill

I mean, yeah, I've been very, very fortunate. So when I went to university, I did it because my three older sisters all went and my dad kind of wanted me to, but I had no idea really what I wanted to do at all. I wanted to play football and have a good time and I did. In those days, I think life was a lot easier for those that were fortunate enough to get to a university, didn't have the same sort of pressure that one can observe on young people these days that go into higher education. And I didn't have any great ambitions. In fact, truth be told, I quite liked the university life and I kind of thought, "Well, I'll stretch this out for as long as I can." Being irresponsible and enjoying myself. And Jim Ford was the lecturer. Professor Jim Ford from Sheffield deserves a lot of credit for things that then happened because to my surprise, as not being the most diligent of students, he encouraged me to consider doing a PhD at the University of Surrey in Guildford, which at the time was, I think, only one of two universities, the other being, I think, Strathclyde that had an energy economic centre.

And I'd done a thesis in my masters at Sheffield about boring portfolio theory of how building societies supposedly behaved, which was so boring. But he said, "Why don't you try and apply that to the OPEC oil producers because you could get a research grant and do a PhD?" I thought, "That sounds good and another three years without getting a job, I'll do that." And it coincided with the second oil price crisis and towards the end of my PhD when what I say now seems kind of crazy compared to the uncertainties going on in the world. But at the time where it was very hard to figure out what was going on in the world with oil prices having risen already in the first crisis in the early 70s and then dramatically in the late 70s, I just sort of sent a CV around various places trying to explore getting a job. And by this time I'd built up a lot of debt, so I needed a job and-

Lord Speaker

A lot of debt enjoying yourself.

Lord O'Neill

A lot of debt enjoying myself is the truth of the... is the reality of what it was. But I needed to pay it off. And so I sent my CV around loads of places and the only ones that actually even responded were really banks in the City, particularly the American ones because of my background, important, I think, in a way how it influenced me. English employers, not being from Oxbridge, nah, but American banks, they naively thought because I'd done this thesis, I knew exactly what the OPEC countries were doing with the money, and that's what dragged me into working in the City. I remember half thinking Bank of America was the one that I went to, this is how uninformed I was at the time. I'm like, "Bank of America, is that like their central bank?" I was very, sort of, let's call it not focused on where my future was going.

Lord Speaker

Yeah, yeah, of course.

Lord O'Neill  

And I didn't feel at ease in the City when I first started, it seemed I thought it would be the real world as opposed to academia. And it all seemed a little bit strange to me at first. But I soon moved to another institution that was a specialist in foreign exchange advice and it had only about 30 of us working in it was called International Treasury Management and it was a very creative bunch and there was myself and one other guy, Paul Cherka, who were the economists, and I just sort of started to really enjoy myself. My job was to try and guess where the dollar was going to go, which I soon learned that virtually nobody's got a clue where the dollar's going-

Lord Speaker

It's still a contemporary issue.

Lord O'Neill

It is, very much so. I just wrote something about it last week. Still trying to kid myself I have any idea where the dollar's going. And I just sort of got into it. But I also had the bug of travel and this important influence on my family's life. Soon after I started that I moved to the first of two times to live in New York in the mid 80s and it really suited my personality and my background and famously people in New York don't really care about your background so long as you're sort of doing something and aspiring that's New York. And I really felt at ease in that environment.

Lord Speaker

Good. You've developed an influential voice, particularly at the time of the financial crisis, and it's still very relevant. And even a few days ago I listened to the Today Programme and you were on that programme and you've been on a number of podcasts as well, so it's great that I can have you here as well. But then you come into the House of Lords as a conservative peer. It sort of struck me as interesting. Explain that.

Lord O'Neill

It's very funny. I'll never forget, what is it now, nine years ago I joined the House and I'm still not entirely sure if I know the right ways at all how one should proceed and behave in the House. But I'll never forget my maiden speech and the Labour opposition beautifully teased me straight away about exactly the same. And quite a lot of them who I'm friends with knew me as a big Manchester United fan and the first thing they said in response to my maiden speech was, "We always thought of you as being a red," Manchester United colours as well. And I couldn't stop laughing, which I don't think was the thing one should do, but it was very funny.

 And it was odd. I've never had very strong political ideology, but a lot of people would observe things that I would say, even though I'd worked for Goldman Sachs for 18 and a half, 19 years as though if anything I'd be left of centre and I think it's reasonably well known when Gordon Brown was becoming Prime Minister, he tried to persuade me to do something with him. So it was odd, but at the core of it, which really goes as to how I have thought since and why it's very nice being a Crossbencher since I've stepped down as a minister.

I am sort of eager to see the right thing done, whether what I think is the right thing is the right thing is another matter, but I don't really care that much about the political ideology in that sense. Maybe I might be regarded as a sort of centrist, whatever that might mean. But the thing that dragged me in was the Northern Powerhouse and it linked to my Manchester roots and David Cameron and George Osborne had effectively adopted many of the ideas that somebody called the City's Growth Commission that I'd chaired.

Lord Speaker

That was 2013.

Lord O'Neill

The first thing I did since I left Goldman and I got this call out of the blue saying, "We want you to come and implement the Northern Powerhouse." And I nearly said no because I wasn't sure I wanted to be connected with one particular party. I was unsure about the whole Westminster, Whitehall thing, but my wife actually said to me that, "If you said no and they found somebody else, you're probably always going to think 'I would've done it X, Y and Z,' and you probably would've regretted it." And so that's what happened and I have no regrets even though I only stayed around as a minister for 18 months, but that's why I joined.

Lord Speaker

Okay. Just quickly, can I take you on to your life in the Treasury as the Treasury Minister?

Lord O'Neill

Yeah, yeah, yeah.

Lord Speaker

Coming in with a bagful of experience. There is a view that Downing Street, for example, is under-resourced that-

Lord O'Neill

Absolutely, yeah.

Lord Speaker

... it is creaking, that it doesn't have a grip on Whitehall and the Treasury is resistant to spending money, for example, the Levelling-up Bill, which has been said in the newspapers that the Prime Minister at the time, Rishi Sunak, didn't fund as a result. Now your desire for devolution will take it forward with the Northern Powerhouse and the cities commission. Your desire for devolution would seem to me to require a different architecture in Whitehall and a different cultural relationship with what we would call the regions.

Lord O'Neill

I've got slightly contradictory views about central aspects of this, but let me try and explain how I feel. There is this perception around the treasury officials and experienced ones who will just quash anything that smells of spending money that is harder to be accounted for. And I'm not sure that that's really true. And from my experience, it depends on the determination of the chancellor and the Prime Minister and how close they think together. And it goes back to why I agreed to join.

 I quizzed George Osborne as to how serious the Northern Powerhouse thing was in his mind and I liked his answers and it seemed to me that was probably a top-five policy priority. And one can look back and question how could it be if they were chopping local authority spending? That's an issue for discussion. But what was clear to me is they fed that behavioural thinking into the mindset of people in Treasury. And so when I was there, a devolution team was set up, which I don't think existed before in Treasury, and you could tell that the ambitious younger Treasury civil servants wanted to be in the areas where the action was happening. So I'm not entirely sure, and this is pretty valid to Rachel Reeves today and Keir as Prime Minister because I think they've said some very good things about certain issues. But I think really, really making sure that people that they need to influence to deliver by constantly focusing on these issues is the way to translate it into people's minds and indeed the whole country's population.

 And here's the contradictory part, take it to the other extreme. And some people outside the world of economics and finance have started to influence me more very recently about this, including Thomas Heatherwick, the great young architect.

Lord Speaker

Yep.

Lord O'Neill

Out of the blue we met recently, he said to me, we never met before, never spoke, he said, "I have this crazy idea about making Manchester the second city of the country and it being a national priority." I said, "You're right." And I think if you really think about how the Britain and the England of the past 100 years have developed, we are ridiculously dependent on London and the Southeast.

Lord Speaker

Absolutely.

Lord O'Neill   

And what is interesting about the randomness of Thomas saying that to me is because of what's already happened a bit with devolution, Greater Manchester over the balance of the past 20 years has actually done pretty well. It's actually outgrown London quite a bit.

Lord Speaker

Yeah, I think you would say it's the centre of Manchester that's done that, not the boroughs.

Lord O'Neill

Well, what is surprising is that that actually isn't now true. Manchester itself has done pretty well, but the limited data we've got, and as somebody that spends a lot of time there, you can feel it anecdotally.

Lord Speaker

But you did say that in 2015, 16.

Lord O'Neill

I did say it. I did say it. And I used to say it to my now sadly, departed pal Howard Bernstein quite often and to Richard Leese, who I teasingly call the Manchester Mafia. That appeared to be the evidence in 2016. But in the data that we now have as the ONS has started to publish more and more data about productivity and growth by borough, to my surprise, it shows that since 2013, growth in Greater Manchester has risen slightly more than Manchester itself. And there's a couple of reasons I think why now, in hindsight it's obvious, as the responsibility for local transport has shifted more to Greater Manchester and the tram network has spread out to some of the boroughs, that's made it a lot easier for people to move around in the same way that people in London frankly take for granted. And secondly, with that, people can move around for work more easily and one has to be careful about this because the absolute base of growth and living standards is still very low.

Lord Speaker

Yeah, of course, of course.

Lord O'Neill

But that has started to improve and very few people, as evidenced by your question, have the slightest idea that this has been happening. But it's factually true, and I think a national policymaker should think about how do we make this even bigger? And not just Greater Manchester. How do we do the same-

Lord Speaker

Well, you have said, if I could say-

Lord O'Neill

... for West Midlands or Glasgow or-

Lord Speaker

Yeah, but on your area in Centre Manchester to any of Liverpool, Leeds or Sheffield, it's a shorter distance than the central line in London. It's a conurbation of eight million people. So how do you satisfy that greater devolution ambition given Jim that you've also laid down about half a dozen points that one needs to look at for proper devolution, what you said that the tax raising and spending powers for the area big, big issue given the centralised system we have here? The infrastructure, transport and digital education, which is a passion of yours, but primary and secondary education, which you focused on skills and, if you like, a genuine level of ambition. And that attracted me because I was being brought up in the same type of area and what happened in the past is pretty good, but it wasn't really very good.

Lord O'Neill

Right.

Lord Speaker

And how do we make it a new future for yourselves? I suppose that's what you're getting at in that particular area and also private sector involvement. Now that's a huge, huge agenda, Jim. So how do you start making your way through that and what would be your timescale for it?

Lord O'Neill

So on that last question or that last two, I remember being quizzed in a big conference many years ago by the one and only John Humphrys when he was still on the Today programme about how would I measure success of the Northern Powerhouse. And my answer related to something on education, and you and I had chatted about it off-air that 20 years back I went to a school in North Manchester that had won a prize that I'd set up for the best in Blackley.

Lord Speaker

Completely. Yeah, that's right.

Lord O'Neill

Four miles from Old Trafford, three miles from the centre of Manchester. And the male life expectancy I found out there, amazingly, lower than Russia, which is notorious for having dreadful male life expectancy. And so my answer to John Humphrys was-

Lord Speaker

But none of the guys who supported Manchester United in the class, mostly white you said?

Lord O'Neill

Yeah, white working class,

Lord Speaker

They were all that. But hardly anyone had ever been to Old Trafford.

Lord O'Neill

Virtually no one had ever been to Old Trafford. I sent a message to the then chief exec, David Gill, the following day and said, "You've got to do something about things like this. You've got people coming from all over the world to Old Trafford, but these young kids who are all United fans three miles away, never been." But my answer to John Humphrys was about that. I said, "John, my answer is if I go back there in 25 years, if I'm still alive, and the male life expectancy is still as low as it is, it will have failed." Because it's about people, right? Ultimately that's what it's about.

But there are many, many things. I often have said there are six ingredients for the success of the Northern Powerhouse. The last one is more oomph. And to really connect all these things that you asked me together, you need to have a belief from civic leaders, from local authority leaders, from the people on how they're sold this story and link in with them to create, let's call it a buzz. You need to have a buzz and a hope that this is real as opposed to just some gimmick to sort of pacify these people for the decline of manufacturing and the decline of whatever else has declined. And I think it's doable. And to Howard and Richard and others credit, including private sets of people, you've actually got that a bit in Manchester these days.

And the key ingredient is people here need to have excitement about giving responsibility to local people in these places to make a national difference. And I try to show that if you could have say three or four other places, West Midlands, Northeast, probably West Yorkshire and two or three other, the smaller ones, but they're the big ones, if they all could be doing the same as Greater Manchester has done and Manchester carries on doing the same, the national growth performance of the UK, the trend rate of growth would rise by 0.2, 0.3%.

Lord Speaker

As a Scot, would that apply to Glasgow?

Lord O'Neill

Yeah, I would include Glasgow. I've not been to Glasgow an enormous number of times, but I have been there for-

Lord Speaker

But you did mention to me about the chief executive of Glasgow, maybe you can-

Lord O'Neill

When we started off the City's growth commission, we looked at any urban place with 500,000 people or more, and there was 13 in the UK, including Glasgow. And so we went there and in each of them we'd do these interviews with key people locally. And I'll never forget the then chief executive of Glasgow saying, "Don't talk to me about devolution. We don't have any effing devolution." And I thought it was very-

Lord Speaker

Curt.

Lord O'Neill

It was very, very intriguing, and I like to walk a lot when I can, and I remember wondering around Glasgow, and it's a substantive place.

Lord Speaker

Absolutely.

Lord O'Neill

And it's substantive enough that if it's got its own buzz going and various things kicking in together, obviously Glasgow would be a place that could make a difference to the national growth performance. So yeah, I'd definitely include Glasgow.

Lord Speaker

Good. Okay. Then let's finish on devolution by an imaginary scenario that the Prime Minister and the Chancellor invite you in to number 10, just you. "Jim, you've got your ambitions for devolution, your identity in Manchester is second to none. You want to revitalise the region, what do we do? How do we work with you? What are the things we've got to change?"

Lord O'Neill

So there's some easy things that have partially had the door opened. I think adult skills, education issues and adult skills, completely devolve them. How can-

Lord Speaker

You've called the Department of Education dreadful.

Lord O'Neill

Yeah. I mean, how can people, as well-intentioned as they may be sitting here in Whitehall, have the slightest idea about what's really needed in these local areas? When you stop to think about it, it's virtually impossible. And with it you can't apply the same sort of conceptual framework that's going to apply in all these different places. So just get rid of it and get rid of that part of those responsibilities in the Department of Education. And I guess it would be also the Department of Business to some degree. So that would be the first thing.

 Second thing, which is very topical in the spending review, which, I guess, will be about a month after our chat is public, I think there's a serious case for exploring devolving aspects of the welfare support budget as it links to critical health illness, and at the centre of it, so-called worklessness. If you look at one of our huge national issues since COVID, what is it, 900,000 people have left the workforce. Enormous problem for our economic growth. Growth depends on the number of people that work and the productivity and we've lost nearly a million. And if you delve into that, a very large number of them are in northern cities and the Midlands. So why not consider devolving parts of that and linking them together? How can local authorities still support social care if they can't deal with any of these things? And how can people down here have a clue how to approach that in Birmingham, say compared to Liverpool? And so I would love to see significant bits of that being devolved.

 And people watching or listening probably think, "Well, how on Earth do you fund that? Is it just the taxpayer?" The answer is not necessarily a national centre. And, again, off-air, you asked this to me, I've lived in the States twice that's, despite what's currently going on, generally been a successful place. But what is interesting to me in this regard is there's a lot of ability to raise or not raise local taxes. And when I mention that to policymakers here, they think I'm bonkers. And the only reason they think I'm bonkers is because it's never happened. But because it's never happened, why does that mean it shouldn't happen? And I think we should have these kind of ambitions, particularly because the tiptoeing towards bits of devolution that have happened seems to be in some places working.

Lord Speaker

in terms of the fiscal rules, you've mentioned that the second fiscal rule borrow to invest, the government needs to get on with that element. And if you like, the scenario that could come across is that we have the fiscal rules, therefore we're constrained in what we can spend. But you have suggested a more imaginative way of the quantitative tightening dealt with by the US and Euro, which could release billions of pounds. You've also spoken about war bonds for defence spending. So give us an idea, imagine a different scenario and explain that to us because the answer would be, look, these things can't be done because we're tied down by their fiscal rules. But you want the fiscal rules changed.

Lord O'Neill

Well, I'm a big admirer of what the Chancellor did on changing her fiscal framework. But I get frustrated by the fact that eight months into this government, the second part of the fiscal rule hasn't been used or challenged. And as far as I understand, the framework from the last Conservative government was changed in order to borrow to invest in things that are going to boost growth. And I don't know whether it's because of this weird 24/7 world with the media that they've got stuck into and the obsession with the narrowness of fiscal rules. But we're into this sort of thing where every three months does the Chancellor have to have some new mini budget in order to find 10 billion to sit within a rule?

Which is kind of bonkers because the second part shouldn't be affected by any of that. And I think they have to be more serious about that or get rid of it. Because from what I understand, and I talked to them quite a lot about it beforehand, that rule allows them to, for the first time in my adult, and I'm interested in your response to this, John, the first time in my adult lifetime, we will get an infrastructure strategy where transparently to the country it will be shown whether project X has big positive effects or not. Think about when you sit back, whether it be Heathrow, Hinkley Point, HS2, I jokingly sometimes say anything with an H, Hammersmith bridge, we never see from any independent body whether doing something better with them is going to have any benefit or not. We just get fed sort of leaked things in the media or the insiders say, of course, but they've creating a body, NISTA merging the infrastructure commission and the infrastructure project authority to show all of this.

 And in my very passionate views, the ones that have big positive multipliers as economists would call it, then you borrow money and you build them. And that will help also boost the trend rate of growth. And that's how we begin to get out of this multi-decade problem where-

Lord Speaker

Longstanding problem.

Lord O'Neill

... we can never do anything because somebody's always got a reason why it should be stopped once it starts. It's bonkers.

Lord Speaker

In the borrow to invest, I'm interested in it from the devolution perspective, Jim. Do you think that needs to apply at local level?

Lord O'Neill

In my very early days in finance, and again, you'd know this, we used to have local authority bond markets.

Lord Speaker

We did.

Lord O'Neill

They don't exist anymore. So again, in principle, once we get more time with the mayoral authority model showing some kind of success and support, why not? And the crucial part of making some of these northern cities connect is what you might call now a northern version of the Elizabeth Line, which seems to work so fantastically in London. Why could you not have some money from central government, the new National Wealth Fund and local metropolitan areas all trying to fund that together? Why could we not do that? The real answer is because it's something we've never done before, but why not?

Lord Speaker

You've got a reputation, rightly deserved, for global economics and looking around the world and that. And you introduced the concept of BRICS, that which Brazil, Russia, India, China, South Africa, and held out high hopes for it. But I read a 2021 article in the Financial Times 10 years after it where you said you were disappointed by that, maybe disappointed in the BRIC countries themselves, but also the G20 and the UN and World Bank not getting behind it. What power or possible power do these BRIC countries have yet in the global economy, given that 85% of the global economy is outwith America?

Lord O'Neill

So this is a hugely valid issue with our friend Mr. Trump at the moment. If you look back, I created this acronym just after 9/11. In fact, it was 9/11-

Lord Speaker

It was 2011, wasn't it?

Lord O'Neill

2001.

Lord Speaker

Sorry, 2001.

Lord O'Neill

Yeah, yeah. So we're coming up to 25 years. And if I look back at the world economy since then, 55% of all the growth that the world has seen has come from the US and China. And unless we want to go back to how we were in the 90s, we can't kid ourselves that because one part of the world is an unelected regime and the other one, at least until the past few months, was seen as the leader of the rest of us. We can't kid ourselves that we can go back to that without a lot of pain. And so the path in which Trump seems to have embarked on of aggressive confrontation, I think, is not likely to be sustained because it is in America's interests for China to continue to do well economically. And I'm worried that a lot of American intellectuals, particularly to the right of centre, don't accept that. And there's something in the human psychology where the US is just so obsessed about being big it doesn't understand that by others becoming bigger, the US can become wealthier.

 So against that background, let me talk more a bit about the BRICS. So 25 years on China and India have been huge successes economically, Russia and Brazil have not. They had a fantastic first decade, but since around 2012, both of them for different reasons, although there is a commonality of being too dependent on commodities, have been really disappointing. On top of that, as a political group, they don't function. What they're really good at is collective symbolism and it is ironic given that we now appear to have a US president that also wants to dismantle the post-war global system because in essence what the BRICS countries keep trying to point out is the global system isn't fair because it doesn't include what's become known as the global south. And they're right. But they don't really go around trying to take more responsibility to help make it better.

But I believe that if Trump either chooses or is more deeply supported by the American population that they're going to force through some big changes whether us in Europe and elsewhere like it or not. That might force other parts of the world to do things differently that they'd been thinking and that could result in some big changes in China and it sounds crazy to say it today, it could result in some big changes in Russia. For good reason, it's very fashionable today to think of Russia being an absolute disaster and a nightmare. But when I dreamt up the BRICS concept, you remember, the G7 had become G8.

Lord Speaker

Absolutely.

Lord O'Neill

Everybody loved Russia. And so it's not impossible for a world where Russia is actually more part of trying to share common global improvement as opposed to this sort of constant adversity, how we think about it today and I like to think I can keep an open mind about this partly because I had the incredible benefit, especially during my time at Goldman, of travelling to a lot of these places frequently.

Lord Speaker

So you're saying there could be an opportunity for these countries with the dislocation that's taking place at the moment in the longer term perhaps?

Lord O'Neill

Maybe even sooner. One thing, having lived through many big global crises or financial and economic ones, is I early on became a believer of the phrase, never let a crisis go to waste. Now, some people and some countries actually quite often do let the crisis go to waste, but the really focused and sensible people and countries don't. And so yeah, I think there is a chance for some good to come out of this chaos.

Lord Speaker

Thomas Friedman at the New York Times made a recent visit to China and he came back with the stark phrase it was 'screwed' because China is a real global player now, particularly in the digital markets. But it's also responsible, at the moment, for about a third of all global products. And by 2030 they're saying that that's 45%. And when President Xi came in, in 2012, it suggested that he had a long-term strategy to make China dominant and people would say that he's made it dominant in the digital world, in the cyber world on issues such as that. And in terms of robots, electric batteries, aerospace, solar power, autonomous cars, EVs, China is really up there. So any dislocation will be perhaps to the detriment of China, but it could be to the detriment of America, and Friedman made the point that given they are the two superpowers, they really need for the future of humanity to work together.

Lord O'Neill

Oh, I'm definitely with Tom Friedman on his last point. Going back to what I said earlier, more than half of all the world growth, including indirectly that we've had, has come from the US and China. So if these guys are going to be kicking lumps out of each other, it's going to negatively affect everybody. And it goes without saying, in my opinion, you can't solve climate change, you can't solve antibiotic or antimicrobial resistance or any of these-

Lord Speaker

 

Lord O'Neill

... truly, truly global things without those two countries. And it is as simple as that. And yes, it might be politically easy to try and explain to your own people that all your problems are because of this evil place in some other part of the world, and the Chinese do that about the US and the US does that about China. But it's ridiculous and it doesn't make sense. The most iconic global company of this generation, Apple, everybody spends half their day on a blinking Apple product

Lord Speaker

Too much.

Lord O'Neill

Yeah. It gets most of its inputs from China. But importantly I think its second-biggest sales market is China and that's the reality. And yes, the politics of playing on your own weaknesses to blame it on others has some short-term appeal, but it's not a recipe for lasting success. So in that sense, Tom is right. But let me throw in one of the things that I... I read that piece, and one of the thing that I think Tom missed.

I don't think China wants to run the world. China's ambition is to make all their people prosperous. And because China's 1.3 billion people, that is what, 15 to 20% of the world?

Lord Speaker  

Yeah, yeah.

Lord O'Neill  

But that's what their ambition is. And I think one of the many dilemmas about the world post-BRICS and the world we're in is that the US does want to set the standards or did want to set the standards for the rest of the world. And so everybody automatically assumes the next big guy is going to want to do the same. But I don't think that's true. I think the Chinese leadership wants to do the best it can for Chinese people and it will try to influence the rest of the world that they perceive as being directly relevant to their internal interests. But I don't think they have the same global ambition that I often hear others talk about.

Lord Speaker

Yep. On that, Freedman, if you remember back to an article he mentioned visiting a car factory, a new car factory and saw the designer 3D model a car and they tested it in conditions of rain, desert, forest, and beach. Now the designer said it took them previously three months to do that, but with an open source 3D, it took three hours.

Lord O'Neill  

Good God.

Lord Speaker   

So the pace of change-

Lord O'Neill   

Unbelievable.

Lord Speaker   

... is absolutely enormous-

Lord O'Neill   

It's scary.

Lord Speaker   

... and it would seem that China is a bit of a cashless society now. I mean, Freedman made the point, and that's not to undermine anything, but he said, "Even some of the people who are begging in China have got a QR code." But I don't want to make fun of that, but it just gives you an idea that cash-

Lord O'Neill   

It's a symbolic point, yeah, yeah. I mean, such is the way of the changing world.

Lord Speaker   

But your visits, would you agree with the position that China's in at the moment in terms of the cyber world and digital?

Lord O'Neill   

I have not been as much recently as I used to go. I've been in China over 30 times in my life, not much recently, and it always struck me that the speed at which they adapt and change is incredible. And certainly I think this is a generally positive attribute of a lot of Asian countries that I've travelled to. I always think of South Korea as being particularly adept at technology for everyone. And I remember being in some quite remote places in many Asian countries, but including China, where they have absolutely no problems in accessing the internet. And even today, as you'd know as well, if not better than me, you can sometimes walk 200 yards away from your office outside Parliament and you can't get a signal.

Lord Speaker   

Sometimes in Parliament by the way.

Lord O'Neill   

Sometimes in Parliament. And I think that is an underappreciated thing that Asian societies do seemingly really well. And as we all become more and more locked into advancing technologies and AI, it would seem to me there is a natural social advantage, let's call it, that a lot of Asian societies probably have got that we haven't because we're still struggling with making sure all this stuff is available to everybody and it's not just harnessed by the elite, which I think is some ways linked to the underlying dilemmas about what's going on in the States today.

Lord Speaker   

Let me take you onto a huge question in terms of the sort of existential questions for humanity. For example, AI, the speed of development of AI, how do we manage AI? Because there's definitely going to be winners and losers as a result of that. Climate change, how do we approach that? And you've got your own ideas now, which I'd really be interested to hear, and given the disruption that's going to take place with the speed of AI, the capacity for failed states and how we deal with disorder. So could you address those points?

Lord O'Neill   

I have no idea [laughter].

Lord Speaker   

Okay. Well let me take... But AI, have you any idea-

Lord O'Neill   

I've got views. I have got views. I think first of all-

Lord Speaker   

You're not coming in here to say you have no idea of an answer.

Lord O'Neill   

I'm leaving now [laughter]. So the first part probably is very unhelpful. I'm an economist by training for good and bad. But throughout my career there has been waves of time where people have said automation is bad for people. Auto industry is one that I often think about, which, of course, has gone through an enormous amount of automation in some of the best places. And at least until we chose to leave the EU, the success of the British-based auto industry, even though there weren't many British-owned companies, had become quite remarkable in terms of manufacturing productivity. So I certainly don't buy this often popularised idea that dramatic growth of AI means none of us are going to ever have a job.

Lord Speaker   

Of course not.

Lord O'Neill   

I don't buy that at all. The second thing to say, and it's because of my involvement in aspects of health issues and to some degree education. I think AI, if correctly guided and regulatory policy thought about really smartly can be enormously positive.

Lord Speaker   

And we need a global framework.

Lord O'Neill   

We probably need a global framework, which currently at the moment would be very hard to pull off. But we also need a very savvy, and again, given your background, especially your time in the Treasury select committee, you'd be able to think about this issue. We have to be careful to not confuse more regulation with better regulation, which is easy to say, but very hard to do.

Lord O'Neill   

But I think of our own productivity problems, and if you really delve into the data, it's become extremely problematic in the NHS, in social care and in big, big public sectors. I think productivity is actually something like 10 to 15% lower than a decade ago in the health system. How can we want to keep putting more and more money into something that has that low productivity? And it seems pretty clear to me that very smart application of AI could cause enormous, enormous productivity improvements in our health system and in our local authority, social care, which in turn would take enormous pressure off the public finances.

 And so I see the optimistic path as being substantial where my final point is the however, I think we do need to make sure that going back to where you and I met and the core of it, arguably, was this idea that just let the financial sector regulate itself and there'd be no problem. That didn't turn out too well, did it? And there's a lot of these AI guys are wanting to do the same. And I think we cannot allow that to happen because they have very defined interests in their business and their wealth growing from it. Whereas you have to internalise instead of externalise the issues. And so we have to be really careful about making sure the incentives for the smart creators are the right ones instead of just the ones that they want.

Lord Speaker   

Let me take you onto the antimicrobial resistance.

Lord O'Neill   

Yes.

Lord Speaker   

Now, Surprisingly, you were appointed chair by David Cameron over health economists, which I applaud by the way on that. But the drug-resistant infections responsible for say 50,000 deaths a year in the UK, but globally, 700,000 with drug-resistant, whether we're talking about malaria, HIV or TB as a result,

Lord O'Neill   

Huge.

Lord Speaker   

And you made a number of recommendations there. Can you illustrate what your view was on that and maybe the dangers presently if we're not taking this seriously?

Lord O'Neill   

Yeah, so I mean it was really weird. When I got asked if I'd consider doing it, I couldn't even pronounce antimicrobial resistance.

 

Lord Speaker   

I thought I tried a good job there.

 

Lord O'Neill   

You did pretty good and thank God it abbreviates to AMR. But it soon turned out that it was fascinating as an economist and somebody with a financial background in it, to think about the complexity of the conflicting issues is hugely analytically interesting. And I often say, and I believe it's still the case today, so far it's the most interesting thing I've ever done in my life for many, many reasons. But at the core of it is a massive, massive, truly global problem. It doesn't matter whether you're a woman or a man, Black or white, Sunni, Shiites, we all 8 billion of us are vulnerable to antimicrobial resistance. And at its core, I believe we need to stop treating antibiotics like sweets. And most of our recommendations focused on demand reducing interventions and supply boosting ones and supply boosting ones are about getting more new drugs, getting vaccines used for health prevention in animals especially so you wouldn't need so many drugs, et cetera, et cetera, et cetera.

I believe, and this goes back partly to the AI issue we talked about on health more broadly, we need to distinguish between those that do need antibiotics. And in many parts of the emerging world, the problem is no access at all, but we need to make sure they get them. But we need to stop all these millions of people all over the world, probably about 20% at least of the people that get them, don't need them. And so we need to get rid of that and permanently reduce the demand. And at the core of it, in this world where technology and AI is becoming so dominant, we need to have affordable state-of-the-art diagnostics. So when you, you've got, I don't know, a sore throat or an ear infection and you pester your GP and because they're so busy and they're sick to death of so many people, they know they've got to see, they just straight away write your prescription.

Lord O'Neill   

We've got to stop that. And I was shocked when I first started this work that like everybody you have this enormous respect for your GP, you think they are the most important people in the world and they get everything right. But then when I thought about this, they just like a foreign exchange person guesses where the dollar's going to go, these guys guess whether you need an antibiotic or not, it's crazy because slowly the drug resistance goes up and up and whether things like gonorrhoea, neonatal sepsis are all becoming increasingly areas where the drugs won't work and if we don't do something about it, all modern forms of surgery in our lives will cease to be able to be conducted. So it's a huge problem and we've got to somehow without scaring our people deal more seriously with it in our own countries and collectively.

 I think on what's happened since our review, actually the UK, despite the chaos that's gone on politically, has actually done a reasonably good job. In terms of initiatives for new antibiotics, the UK is probably the leading country on trying to pioneer something that's called a sort of Netflix model where they're sort of trialling buying in bulk and for a limited amount of usage. And in agriculture, the UK adopted our target and actually achieved what we recommended every country should do. But at the end of the day, if the rest of the world doesn't try and do the same, we're still going to be affected by it badly. But it's hugely important, and I'm actually getting back involved in it, I'm going to chair an initiative about trying to create an incentive system for the right diagnostics to apply to neonatal sepsis because there you can identify very clearly the very worrying number of young or newborn kids that end up losing their lives because they haven't been diagnosed or the parents haven't been or the mothers haven't been.

Lord Speaker   

Well Jim, that was a fascinating conversation. We could go on for quite a time yet, but I've got a final question for you.

Lord O'Neill   

This sounds troubling.

Lord Speaker   

No, not at all. I was raised on the north bank of the River Clyde and on the opposite bank, one guy was brought up in Govan, mainly an Alex Ferguson. Now given you are fanatical for Manchester United, when is a future Manchester United manager going to replicate the success that he's had-

Lord O'Neill   

Oh, my God.

Lord Speaker   

... or are you just going to let the Scots predominate

Lord O'Neill   

Amongst the many, many fortunate things in my life is that I'd like to regard myself as a friend of Alex's. I actually had lunch with him in South Manchester two weeks ago and the guy remains a true, true, true legend and quite how he managed to cope for the last eight years of his amazing success under the ownership that is the source of United's problems I have no idea. But Alex is a genius and God bless him. We need a new Alex. That is for sure.

Lord Speaker   

I see you've dodged the question, answer the question.

Lord O'Neill   

I quite like the current manager, but the problem with the way... I'm going to contradict myself. I've been so long a United fan. I remember when we actually got relegated and some of my greatest memories as a fan was actually that brief period. Whether it was because I felt confidently we were coming back to be a big success or not, I don't know. But my point is Manchester United have no right to persistent success. And in fact, we could do a whole podcast on this. In fact, if you look over the whole history of United, we only won the league twice outside Sir Matt Busby and Sir Alex Ferguson.

Lord Speaker   

Two Scots.

Lord O'Neill   

Two Scots.

Lord Speaker   

Well, there we are.

Lord O'Neill   

So maybe the answer is we need to find another Scots manager

Lord Speaker   

Okay, for me a good note to end there.

Lord O'Neill    :

Maybe something for you to do when you step down from this position.

Lord Speaker   

Thank you very much, Jim. That was fascinating. I'm really privileged that you came along.

Lord O'Neill   

Listen, listen, I'm so honoured and shocked that you'd asked me to do it and-

Lord Speaker   

No problem.

Lord O'Neill   

... it's very, very kind of you. Thank you.