Jim O’Neill, the former Goldman Sachs chief economist, has stepped down as a Treasury minister and resigned the Conservative whip amid reported tensions over Theresa May’s approach to China.

The high-profile businessman was given a peerage and appointed to George Osborne’s Treasury team last year with responsibility for the “northern powerhouse” project.

He is known for coining the phrase “Brics”, an acronym for the emerging economies of Brazil, Russia, India, China and South Africa.

However, he resigned his post as commercial secretary to the Treasury on Friday without giving a reason for his departure, apart from saying he had successfully completed a review of antimicrobial resistance, which he started before he was a minister.

In his letter to the prime minister, he played down speculation that he was unhappy in the job because of her cautious approach towards Chinese investment, and her replacement of Osborne’s focus on the north with a broader industrial strategy across the whole country.

Jim O’Neill (second from left) on the former chancellor George Osborne’s team in March. Photograph: Stefan Rousseau/PA

“I primarily joined, however, for the specific purpose of helping 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,” Lord O’Neill 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.”

However, there has been persistent speculation that O’Neill would step down following a Financial Times report in July that cited his unhappiness with May’s approach to China, exposed by her handling of plans for a new nuclear plant at Hinkley Point.



His decision to resign the Conservative whip and sit as a crossbencher in the House of Lords also suggests an ideological break with May’s Conservatives in comparison with the party’s approach under David Cameron and Osborne.

May said she was sorry about O’Neill’s resignation and thanked him for his service. She 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. You have laid important foundations in these areas, and the government will build on them.

“I would particularly like to pay tribute to your ground-breaking work on antimicrobial resistance. You should take great pride in seeing your review culminate this week in the UN high level agreement.

“You have played a vital role in building global consensus on this important issue, which will have long-lasting benefits.”