Treasury minister Lord O'Neill quits government

Lord O'Neill was brought into government by George Osborne

Treasury minister Lord O'Neill, a key figure in pushing the Conservatives' Northern Powerhouse agenda, has resigned from the government.

The former Goldman Sachs executive, also a key advocate of the UK forging strong links with China, was commercial secretary for 18 months.

In his resignation letter, he said the case for global trade ties and English devolution was stronger than ever.

PM Theresa May said the peer had made a "significant contribution".

Lord O'Neill did not give a specific reason for his departure but cited the fact that his work on antimicrobial resistance - for which he conducted a review for the government in 2014 - had come to an end.

In a statement, the economist said he joined the government largely to help "deliver the Northern Powerhouse, and to help boost our economic ties with key growing economies around the world, especially China and India and other rapidly emerging economies".

Analysis by Kamal Ahmed, the BBC's economics editor

The former Goldman Sachs banker Jim O'Neill was passionate about a lot of things - Man Utd being one of them.

He was also a firm believer in the Northern Powerhouse and close relations with China.

Both have found themselves questioned since Theresa May became prime minister.

Lord O'Neill was very much a George Osborne hire. The former chancellor was delighted when he agreed to join the Treasury team. His departure sees the dismantling of another part of the Cameron-Osborne legacy.

I doubt Lord O'Neill felt all that comfortable in a May-led administration, evidenced by his decision to quit the Conservative whip in the Lords and become a cross bencher.

And the prime minister has been clear - this is a new chapter in Conservative politics.

Read more from Kamal

He wrote: "The case for both to be at the heart of British economic policy is even stronger following the referendum, and I am pleased that, despite speculation to the contrary, both appear to be commanding your personal attention.

"I am leaving knowing that I can play some role supporting these critical initiatives as a non-governmental person."

Lord O'Neill said he would now serve as a crossbench peer - not affiliated to any political party - in the House of Lords.

Big blow

Accepting the peer's resignation, Mrs May wrote: "You have made a significant contribution to driving forward the government's work on delivering growth beyond the South East through the Northern Powerhouse and on promoting stronger economic links with emerging economies, including China and India."

Labour described Lord O'Neill's resignation as "a huge blow" for Mrs May, and blamed her shift in policy on grammar schools.

Shadow minister without portfolio Jon Ashworth added: "His reported concern over Hinkley [nuclear power station plans] and the Northern Powerhouse is yet more evidence of a prime minister whose basic competence is more and more being called into question."

Former chancellor George Osborne, who brought Lord O'Neill into government after the 2015 election, said last week that Mrs May had had a "wobble" over her support for the Northern Powerhouse after she took over from David Cameron.

The UK's relationship with China has also been in spotlight since Mrs May took over.

The government surprised some by delaying its final approval of a new nuclear plant at Hinkley Point - in which China is a major investor - and insisting on tougher security safeguards.