After exiting the council Northey stood unsuccessfully for Parliament against the then Prime Minister, Robert Muldoon, in the Tamaki electorate in the 1981 election.

He was selected as the Labour candidate in Onehunga in preference to Chris Diack, a supporter of controversial former finance minister Roger Douglas.

After missing out on the nomination Diack and his allies in the branch drained the electorate cash accounts by lump paying more than $6000 in outstanding debts to party headquarters, leaving just $7 to fund Northey's campaign in an act of spite.

[11] In the 1996 election he contested the Maungakiekie seat after boundary changes caused by the introduction of mixed-member proportional (MMP) representation, but was defeated in an upset by National's Belinda Vernon.

In June 2020 it was revealed that the New Zealand Security Intelligence Service had spied upon Northey during his time in Parliament, under the pretext of his support for racial equality and nuclear disarmament.

[12] At the time he was chair of the Justice and Law Reform Select Committee, which was responsible for financial oversight of the SIS, and of legislation altering its powers.

He has since entered local politics, serving on the Auckland City Council holding senior committee roles.

[14] Northey became a member of Labour's national council for six years and was chairman of the party's policy committee.

In 2000 he stood unsuccessfully to replace Bob Harvey as President of the Labour Party, but was defeated by Mike Williams.