UK Regional Income Divide Unchanged for 30 Years, Report Finds

The divergence in household incomes across the UK's regions has remained largely stagnant over the past three decades, despite successive governments' pledges to narrow the gap. A recent report by the Resolution Foundation indicates that the divide between the wealthiest and poorest parts of the country, based on household income before housing costs, has been consistent since 1997. These findings underscore a significant challenge for future administrations aiming to rebalance the country, particularly for prime minister-in-waiting Andy Burnham.

According to the report's detailed findings, between 1997 and 2023, the gross household disposable income per person in London, at £27,900, remained three-fifths higher than in Northern Ireland, which stood at £17,300. The regional inequality persists profoundly at the local level as well; disposable incomes in Kensington and Chelsea, the wealthiest area, were £60,584, four and a half times higher than in Leicester, the poorest, at £13,398. This substantial disparity has remained stable for nearly three decades.

The study provides stark data illustrating the entrenched nature of income inequality: over half (54%) of local authorities in the poorest fifth for income per person in 1997 remained in that position in 2023. Conversely, 82% of the richest areas maintained their top positions. While employment and pay gaps have narrowed, the disparities in household incomes and productivity continue to be wide and stubborn. Ruth Curtice, Chief Executive of the Resolution Foundation, noted that while Manchester's remarkable revival shows that decline is not destiny, major UK cities still significantly underperform compared to London.

This enduring regional income disparity signals persistent structural issues within the British economy. Such inequalities not only raise concerns about social justice but also constrain national economic growth potential. Low income levels and limited opportunities in various parts of the country can depress overall prosperity, contributing to economic stagnation. Particularly, the northern regions of England and other disadvantaged areas consistently lag due to a lack of economic dynamism.

Andy Burnham, the presumptive next prime minister, has pledged to deliver "good growth in every postcode" as part of a devolution agenda aimed at rebalancing power away from Westminster to spread prosperity across the UK. Burnham plans to establish a "No 10 North" as a nerve centre to devolve power and resources across the country. However, the Resolution Foundation emphasized that translating these ambitious goals into reality would require investment in transport, housing, and broader economic development on a scale that no recent political leader has come close to meeting. Experts warn that unless such investment is taken seriously, the economic and political costs of Britain's geographic divides will continue.