London-Less than three months after coming into office, British Prime Minister Theresa May is facing the first test of her government’s policies following the resignation of Jim O’Neill from the finance ministry after he reportedly clashed with the PM over Chinese investment in the country.
Former Goldman Sachs chief economist O’Neill had warned in July that he could quit his post as junior Treasury minister over May’s approach to Chinese investment which appeared less welcoming than that of her predecessor David Cameron.
O’Neill was closely associated with Cameron’s policies.
Shortly after becoming prime minister, May ordered a last-minute review into an 18 billion-pound nuclear power plant project at Hinkley Point which was backed by Chinese funding. The project was given the green light earlier this month but the review alarmed officials in China.
One of the areas that Manchester-born O’Neill worked on was the Northern Powerhouse project to improve infrastructure in northern England and which aimed to attract investment from China.
In his resignation letter to May, O’Neill said the case for the project was even stronger after June’s decision by voters to leave the European Union, and he was pleased that “despite speculation to the contrary” it appeared to be “commanding your personal attention.”
In a related development, there are still uncertainties on the intentions of the divided British government on when to leave the EU.
Boris Johnson, the most prominent leader of the Brexit campaign and now May’s foreign minister, said Britain would trigger divorce by invoking Article 50 of the European Union’s Lisbon Treaty in a letter early next year.
“What we’re doing is talking to our European friends and partners now in the expectation that, by the early part of next year, you will see an Article 50 letter, we will invoke that, and in that letter I’m sure we will be setting out some parameters for how we propose to take this forward,” Johnson told Sky News television in New York.
When asked about Johnson’s comment, a Downing Street spokeswoman said: “The Government’s position has not changed – we will not trigger Article 50 before the end of 2016 and we are using this time to prepare for the negotiations.”
Article 50, a the 256-word provision drafted by a former British ambassador to the EU, has never been used so there is no legal precedent for how it works though it gives a two-year period to work out the divorce.