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Government in denial over North-South divide

06 August 2007

Ten years of Labour Government has failed to close the gap in prosperity between north and south, according to new research from ippr north to be published in October.

A full sub-regional breakdown for average income is at the end of this release.

ippr north’s report cites Government figures that measure the gap between regions. These figures show that since 1997, the North East, the North West, Yorkshire and Humberside and the Midlands have all moved further away from the national average, on the Government’s favoured measure of output per head (known to economists as ‘Gross Value Added’). Over the same period, London has out paced the rest of Britain.

ippr north’s report shows that the Government’s target (which was set by Gordon Brown in 2002) has only been to reduce the average rate of growth between two groups of regions:

  • on the one hand, the North East, the North West, Yorkshire and Humberside the East and West Midlands and the South West, and;
  • on the other hand, London, the South East and the East of England.

The report says this target is inadequate and has led to too little attention and resources going into addressing the north-south divide. The Government is reviewing all its targets in this October’s Comprehensive Spending Review.

Sue Stirling, Director of ippr north, says:

“The Government needs to get real on the north-south divide. At the moment, it is in denial. The Government has not explicitly targeted the gap between rich and poor, nor the gap between north and south. As a result, the work of Labour’s Regional Development Agencies has only succeeded in reducing the north’s relative decline.

“The standard Government line on the north-south divide is that inequalities within regions are as dramatic as those between regions. This is true but just because you deal with inequalities within regions it does not mean you should ignore inequalities between regions. 

“This October’s Comprehensive Spending Review will almost certainly scrap the Government’s current target, and not before time. But we need a proper target to replace it that explicitly focuses on the gap between north and south.”

ippr north’s report recommends a new target to reduce the absolute gap in levels of GVA between regions, not just the gap between growth rates. The target should apply to individual regions, not groups of regions. One way of operationalising this would be to have a conditional target, whereby a region whose GVA growth was below average would have the target of achieving above-average growth over the target’s time horizon (in the case of the 2002 PSA target the time horizon was set at 6 years). For regions with above-average growth the target would not apply in the same way as their performance would already be above average – they could be tasked with maintaining their current growth rate.

Notes to editors

The Northern Economic Agenda by Howard Reed, Olga Mrinska and Michael Johnson will be published by ippr north in the autumn.

The Government’s current target is to:

"Make sustainable improvements in the economic performance of all the English regions by 2008, and over the long term reduce the persistent gap in growth rates between the regions, demonstrating progress by 2006."

The Government’s recently published Sub-National Review proposes regionalising this aim by giving each region a single over-arching growth objective aimed at increasing the regional Gross Value Added (GVA) per head. It also sets Regional Development Agencies five outcome-based performance indicators: GVA per hour worked, employment rate, skills attainment, research and development spending as GVA percentage, and business start-ups. But the new objectives do not address the gaps between regions.

Gross Value Added (GVA) per head by region

 

1997

2005

United Kingdom

  100

  100

 

 

 

North East

  81

  79

North West

  90

  88

Yorkshire & the Humber

  90

  87

 

 

 

East Midlands

  94

  93

West Midlands

  93

  89

 

 

 

East of England

  107

  107

London

  129

  136

South East

  114

  115

South West

  93

  94

 

 

 

England

  102

  102

Wales

  81

  78

Scotland

  99

  96

Northern Ireland

  81

  80

Latest figures for annual average income per head (£ per head)

UK

£13,302

 

 

England

£13,486

 

 

North East

£11,407

 

 

TeesValley and Durham

£11,380

Hartlepool and Stockton-on-Tees

£11,402

South Teesside

£10,980

Darlington

£11,670

Durham CC

£11,531

 

 

Northumberland and Tyne and Wear

£11,430

Northumberland

£12,833

Tyneside

£11,223

Sunderland

£10,481

 

 

 

 

North West

£12,199

 

 

Cumbria

£12,814

West Cumbria

£11,850

East Cumbria

£13,693

 

 

Cheshire

£13,989

Halton and Warrington

£12,628

Cheshire CC

£14,617

 

 

Greater Manchester

£11,833

Greater Manchester South

£11,956

Greater Manchester North

£11,691

 

 

Lancashire

£11,768

Blackburn with Darwen

£9,970

Blackpool

£11,085

Lancashire CC

£12,070

 

 

Merseyside

£11,810

East Merseyside

£10,992

Liverpool

£10,914

Sefton

£12,576

Wirral

£13,255

 

 

 

 

Yorkshire and the Humber

£12,224

 

 

East Riding and North Lincolnshire

£12,012

Kingston upon Hull, City of

£10,416

East Riding of Yorkshire

£13,460

North and North East Lincolnshire

£11,768

 

 

North Yorkshire

£13,784

York

£12,810

North YorkshireCC

£14,096

 

 

South Yorkshire

£11,696

Barnsley, Doncaster and Rotherham

£11,428

Sheffield

£12,089

 

 

West Yorkshire

£12,068

Bradford

£11,348

Leeds

£12,395

Calderdale, Kirklees and Wakefield

£12,192

 

East Midlands

£12,543

 

 

Derbyshire and Nottinghamshire

£12,251

Derby

£11,708

East Derbyshire

£11,863

South and West Derbyshire

£12,881

Nottingham

£10,071

North Nottinghamshire

£12,264

South Nottinghamshire

£13,877

 

 

Leicestershire, Rutland and Northamptonshire

£12,933

Leicester

£10,550

Leicestershire CC and Rutland

£13,684

Northamptonshire

£13,221

 

 

Lincolnshire

£12,489

Lincolnshire

 

 

 

West Midlands

£12,134

 

 

Herefordshire, Worcestershire and Warwickshire

£13,570

Herefordshire, County of

£12,394

Worcestershire

£13,508

Warwickshire

£14,029

 

 

Shropshireand Staffordshire

£12,393

Telford and Wrekin

£11,598

Shropshire CC

£13,181

Stoke-on-Trent

£10,372

Staffordshire CC

£12,862

 

 

West Midlands

£11,281

Birmingham

£10,961

Solihull

£15,162

Coventry

£11,167

Dudley and Sandwell

£10,954

Walsall and Wolverhampton

£10,813

 

East of England

£14,159

 

 

East Anglia

£13,166

Peterborough

£12,838

Cambridgeshire CC

£14,268

Norfolk

£12,322

Suffolk

£13,310

 

 

Bedfordshire and Hertfordshire

£15,126

Luton

£11,308

Bedfordshire CC

£13,902

Hertfordshire

£16,263

 

 

Essex

£14,569

Southend-on-Sea

£14,172

Thurrock

£12,436

Essex CC

£14,849

 

 

 

 

London

£15,842

 

 

Inner London

£17,198

Inner London - West

£22,441

Inner London - East

£13,973

 

 

Outer London

£14,948

Outer London - East and North East

£13,533

Outer London - South

£15,719

Outer London - West and North West

£15,715

 

 

South East

£14,898

 

 

Berkshire, Buckinghamshire and Oxfordshire

£15,496

Berkshire

£15,034

Milton Keynes

£13,943

Buckinghamshire CC

£17,415

Oxfordshire

£15,159

 

 

Surrey, East and West Sussex

£15,856

Brighton and Hove

£13,966

East SussexCC

£13,830

Surrey

£17,785

West Sussex

£15,092

 

 

Hampshire and Isle of Wight

£13,704

Portsmouth

£11,338

Southampton

£11,173

Hampshire CC

£14,720

Isle of Wight

£11,787

 

 

Kent

£13,911

Medway

£12,820

Kent CC

£14,111

 

 

 

 

South West

£13,260

 

 

Gloucestershire, Wiltshire and North Somerset

£13,710

Bristol, City of

£12,446

North and North East Somerset, South Gloucestershire

£13,979

Gloucestershire

£13,653

Swindon

£13,854

Wiltshire CC

£14,481

 

 

Dorset and Somerset

£13,558

Bournemouth and Poole

£13,547

Dorset CC

£14,037

Somerset

£13,192

 

 

Cornwalland Isles of Scilly

£12,101

 

 

Devon

£12,573

Plymouth

£11,635

Torbay

£11,807

Devon CC

£13,029

Contacts

Matt Jackson, ippr senior media officer, 020 7339 0007 / 07753 719 289 / m.jackson@ippr.org

Richard Darlington, ippr media manager, 020 7470 6177 / 07738 320 645 / r.darlington@ippr.org


 

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