It's actually a bit of an odd title. I'm fairly sure I heard it was a reference to something in Rhodesia/Zimbabwe (not to northern England strangely despite the setting) but I can't remember exactly. Can anyone be more specific?
Apparently from a speech by the liberal leader of Rhodesia (now Zimbabwe) Sir Garfield Todd. The original play apparently featured a lot more about Rhodesia than the TV version. Still don't quite understand the choice of title though.
As chrishallam suggested, the title is a hangover from the days of the play, which featured a subplot involving the corrupt oil trade in South Africa during the 1970s. The phrase 'Our Friends in the North' comes from a leaked internal memo from BP (who were involved in this sticky situation) which made a coded reference to making sure that their 'friends in the north' were looked after; in the memo, the phrase referred to Ian Smith's rebel government In Rhodesia.
'What does it matter what you say about people?' Touch of Evil (Orson Welles, 1958).
I also believe it has to do with the viewer to feel closer to the characters. Our friends gives us as a viewer the feeling that we actually know the persons, which again makes the story more realistic.
My understanding was different - I realised it was a political quote but I thought it was used in this context to depict the patronising tone of the powers that be in Westminster, as in "Our friends in the North may not be too pleased about these coalpit closures, but hey ho".
My body makes no moan But sings on: All things remain in God.
Bishop's hit the nail on the head here. The origins of the phrase outlined by others add to its resonance - or, if you like, Bishop's observation adds colour to its other associations. I'd add that the dramatisation of struggles for power, wherever they may be set, will tend to revolve around the centres of power, the seats of government, the nations' capitals. The title 'Our Friends in the North', then, suggests the patronising tone one might expect from Westminster power brokers towards the provinces, together with the hush-hush, nudge-nudge shenanigans of corruption and organised crime.
Come to think of it, if you watch the opening scene of Get Carter - organised crime, Newcastle & London, but no politics, you realise Our Friends in the North might've worked just as well as a title.