The Resolution Foundation has warned that there has been almost zero progress on regional household income divides in the UK over the past 30 years. With a new Labour Party Prime Minister incoming, the thinktank has issued a stark warning, urging Andy Burnham, the Labour Party Prime Minister-in-waiting, to bring true devolution to the regions.
No Progress Since 1997
The thinktank's report found that between 1997 and 2023, the level of gross household disposable income (GDHI) per person in London remained three-fifths higher than in Northern Ireland. Disposable incomes in the richest area of Kensington and Chelsea were four and a half times higher than in the poorest, Leicester, in the East Midlands.
Ruth Curtice, the chief executive of the foundation, said that Manchester’s economic revival showed “decline is not destiny”. She added: “PM-in-waiting Andy Burnham has rightly put regional inequality at the top of his agenda. But turning ambition into reality will require investment in transport, housing and wider economic development on a scale that no recent political leader has come close to meeting. Unless that investment is taken seriously, the economic and political cost of Britain’s geographic divides will continue.”
Manchester's Economic Growth
Manchester’s GDHI per person grew two-fifths (40%) in real terms between 1997 and 2023, compared to 36% in London and just 8% in Belfast. Manchester had the highest GDHI change every year since 2017. Over the 2010s, the gap between low-employment (10th percentile) and high-employment (90th percentile) areas shrank by 3 percentage points, the report found.
Wage Gaps and Minimum Wage
Wage gaps have come down, primarily at the bottom of the pay distribution, thanks to a rising minimum wage. The minimum wage has ‘spillover’ effects further up the pay distribution, playing a role even in reducing median pay gaps, it added. However, geographic variation in average household income per person is much higher when looking at the level of the local authority as opposed to the region. The amount of spatial inequality has broadly stayed the same over this 26-year period.
