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Mr Bric fears for Brexit Britain: rock star economist Jim O’Neill on what lies ahead

“Talk about the irony: here are we dragging ourselves out with Europe looking better than it has done for at least ten years, if not twenty.”

The first minister to resign from Theresa May’s government (though far from the last) was Jim O’Neill. On 23 September 2016, the former Goldman Sachs chief economist, who was appointed the previous year by George Osborne to oversee the Northern Powerhouse project, left his post as commercial secretary to the Treasury.

Though O’Neill’s departure was superficially amicable, it reflected multiple tensions with May’s team. The rock star economist (who coined the term “Brics” in 2001) was said to have been alienated by the lack of commitment to a northern supercity (which he calls “ManSheffLeedsPool”). I met O’Neill, 60 – dressed in an open-necked blue shirt with a red tie round his shoulders – to discuss the reasons for his resignation and the future of the global economy.

“The Northern Powerhouse is not as important a priority as it should be, and as it was under David [Cameron] and George [Osborne],” the Mancunian told me over tea at the Mayfair Arts Club. “But it’s nowhere near as bad as it was in that period when her two aides [May’s former joint chiefs of staff Fiona Hill and Nick Timothy] were around.”

Timothy has denied opposing the Northern Powerhouse, stating that he merely wanted an equivalent focus on the Midlands and other regions. But O’Neill, a board member of Osborne’s Northern Powerhouse Partnership, maintained that Team May’s antipathy to the former chancellor led them to undermine the programme.

“I was – and remain – stunned by how something as important as this can be so easily influenced by two unaccountable people [Hill and Timothy],” he said. “It was easy for me – why would I want to be part of this? I didn’t realise I was working in the Soviet Union. The whole cabinet was petrified of them, never mind others in the civil service.”

This was not the only cause of O’Neill’s departure. He was irritated by the prevarication over Chinese investment in the Hinkley Point nuclear power station and by May’s championing of grammar schools (“I went to a comprehensive school… I’m a strong believer that grammar schools are not the right way”). And although he relished government (“the general capability of the civil service is fabulous, especially at the Treasury… It reminded me of Goldman Sachs”), O’Neill had little time for the House of Lords.

“The biggest reason I left was because I didn’t want to take the Tory whip in the Lords – because I’m not a Tory. And, as I knew beforehand, being a minister in the Lords is such a time-consuming thing. Every Monday, Tuesday, Wednesday most weeks, I couldn’t go home until God knows what time, just in case there’d be some weird vote that I’d have to go with the government on.”

Midway through our conversation, O’Neill quipped that he had “Mr Brics” stamped on his forehead. The economist is indelibly associated with the acronym, which refers to the emerging economies of Brazil, Russia, India and China.

Is it still a useful concept?  “Yes, is the simple answer. Sixteen years on, China over that period has grown more than I assumed it would… This summer we had the ninth political leaders’ meeting.”

O’Neill named France (because of Emmanuel Macron’s reforms), Poland (“other than Australia, the only economy of the global Top 30 that has not had a recession in the past 30 years”), Chile and India as the economies to watch. 

“Because of its demographics, if India did a few things right it could easily grow by 12 per cent a year.” But he added: “Unless they do a lot more on sanitation and personal hygiene, India’s got a mammoth antibiotic problem coming” (O’Neill led a review of antimicrobial resistance for the British government).

As a student of globalisation, he can envisage a world where the UK’s trade with China and India outweighs that with Europe. The most interesting economic statistic of the year, he told me, was that Germany’s largest trade partner is now China. “If you want to be good at global trade, you’ve got to be good at global trade. Whether you’re in the EU or not is a bit of a red herring.”

Yet as a “dispassionate Remainer”, he warned of Brexit: “Unless we can somehow get a bespoke deal for certain industries, it’s really bad news… We have two of the five most productive automotive plants in the world [in Sunderland and Swindon]  and it’s only because we’re, crucially, connected through the single market.”

Meanwhile, the global economy is growing at the strongest rate since 2008. “Eight of the ten largest economies are all accelerating at the same time, which is quite rare,” O’Neill noted. “Unfortunately, us [Britain] being one of the two that aren’t. Talk about the irony: here are we dragging ourselves out with Europe looking better than it has done for at least ten years, if not twenty.”

Outside economics, O’Neill’s greatest passion is Manchester United. He spoke savagely of the Glazer family’s leveraged buyout. “Some would say who am I to criticise that? But to apply that in such an aggressive way to something that is at the core of so many people’s lives is just inappropriate.” He gave up his United season ticket three years ago and prefers to watch away games.

I ended by asking O’Neill whether he would return to government. “Very unlikely. Not being able to make what are objectively clear policy decisions because of the games of the party… I find that quite a turn-off.” 

George Eaton is political editor of the New Statesman.

This article first appeared in the 30 November 2017 issue of the New Statesman, The most powerful man in the world

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What the university staff strike reveals about our broken higher education system

The marketisation of our universities is facing its biggest opposition yet.

The biggest industrial strike ever by academic staff in Britain's universities has begun.

National newspapers are running panicked headlines about what may happen if the strike lasts: “University strike puts final exams in danger”, warns The Times. “University strikes could hit exams and graduation ceremonies”, says the Guardian. But as well as affecting the education of students who are heavily in debt, the strikes will hit academics with very different levels of job security, and university establishments at a time when higher education is on the political agenda. 

The University and College Union voted for strike action last month over a failure to reach an agreement with Universities UK (UUK), the body which represents of the Vice Chancellors of every university in the country, over changes to academics' pension plans.

The pension scheme at the heart of the conflict, the Universities Superannuation Scheme, currently has over 400,000 participants. UUK have stated that the pension scheme currently has a £6.1bn deficit and that the cost of future benefits has increased by one third since 2014. They are proposing a switch from a direct benefit pension scheme (fixed, guaranteed pension payments) to a direct contribution scheme (reliant on stock markets) to maintain the scheme's sustainability.

However, many academics argue the deficit is overstated, and is instead a cynical attempt to reduce the universities' pension liabilties. 

Older and more senior academics who have already spent several decades paying into the system will be less affected by the changes, as contributions will be protected under the old scheme until 2019. 

UCU however allege that this change will result in an average yearly £10,000 loss in staff members' pensions. Academics at 61 universities, including the likes of Oxbridge, UCL, Imperial College London, Cardiff University and the University of Edinburgh will be striking for 14 days. 

The strikes begin on Thursday, and yet no-one seems to know what will happen. FAQs provided by universities to students all appear to have a similar theme: Academic disruption will be minimised, but if you have a complaint, please email us. 

16 percent of academic staff at these universities will be on strike (because most academics aren't a part of a union) but lectures and seminars have still been cancelled. It is still unclear for students whether they will be examined on subjects that they will miss. 

But for the most part, students appear to support the academics. Mark Crawford, a Postgraduate Sabbatical Officer at UCL (the biggest university in the country to strike) says he has been pleasantly surprised by the number of students who have messaged asking him how they can help. 

Perhaps this is due to the pains some academics have gone to minimise the disruption their students will face. Some lecturers have made presentations available online, and have amendeded their reading lists. One academic at King's College London, KCL, has even rearranged her seminars off campus. 

Yet this feeling of goodwill may disappear when reality kicks in. Robert Adderly, a second year Law student at KCL, and a campaigner for the student group provocatively titled “Students Against Strikes” says he’s unsure how supportive students will be once the action actually begins. 

Adderly, while sympathetic to the concerns of the academics does not believe striking is the most effective way to negotiate with Universities UK. He goes on to say that he believes “neither side is willing to compromise” and says that the “only people losing out are students.”

He also says he believes a lot of students “haven’t assessed how they really feel about the strikes” and that the “longer it goes on, the more students who will get angry”. 

Adderly's thoughts are backed by a poll conducted by Trendence UK, a market research company, which found that 38 per cent of students supported their academics on strike, compred to 38 per cent who did not.

Several academics have spoken to the New Statesman off the record about feelings of uneasiness around the strike, arguing that there is a better, less disruptive way of resolving the pension debate. Others are unsure about the leadership of UCU and believe striking will only lead to a build up of work later. 

Professor Andrew Pomiankowski at UCL emailed his students saying while he supported the strike, he would continue conducting his classes this week. He later told the New Statesman “I have a lot of sympathy with the reasons for the strike - the loss of provision of pensions, especially for the younger members of staff. Talking is the only way of resolving this problem. However, I don’t feel that I should disrupt teaching of students. That’s a step too far.”

The strikes go to the heart of the debate about the marketisation of university. Even students who support the strike are in conflict with one another. Notably, students who support the strikes are unhappy with campaigns such as Adderly’s which are also demanding universities compensate them for lost teaching hours. Crawford says your “first instinct shouldn’t be how much am I losing? It should be how much is our staff losing.”

On the other hand, Adderly argues we shouldn’t pretend the marketisation of university hasn’t already happened, saying “It’s here. It’s happening. We are now consumers.” 

Though it appears unlikely that universities will refund students, these strikes are highlighting how our attitudes to higher education have changed in a short space of time, and causing some to ask if this is the future we want for British higher education.