A recent report reveals that the significant income disparity across regions in Britain has remained largely unchanged over the past 30 years, despite numerous governmental pledges aimed at reducing the gap. This presents a notable challenge for Andy Burnham as he prepares for his potential role as Prime Minister.
The Resolution Foundation’s findings indicate that since 1997, there has been minimal progress in addressing the substantial differences in household income across the nation, particularly when housing costs are excluded. The report emphasizes that Burnham, who aims to promote “good growth in every postcode” through a devolution strategy, must commit to substantial investments in transport, housing, and regeneration to overcome three decades of persistent regional income disparities.
From 1997 to 2023, the gross household disposable income per person in London was reported at £27,900, which is approximately 60% higher than the £17,300 figure recorded in Northern Ireland. The report also highlights that income inequality remains pronounced at the local level, with the richest area, Kensington and Chelsea, boasting a disposable income of £60,584—four and a half times greater than that of Leicester, the poorest area, at £13,398. This disparity has remained unchanged for nearly thirty years.
The report underscores the persistent economic divisions, noting that over half (54%) of local authorities classified as the poorest in terms of income per person in 1997 continue to hold that status in 2023. Conversely, 82% of the wealthiest regions have maintained their positions at the top of the income hierarchy.
Despite the ongoing promises from successive governments to address Britain’s uneven economic landscape, including initiatives like Boris Johnson’s “levelling-up” strategy, the report found that the income gap between residents of the wealthiest and poorest local authorities remained consistent from 2019 to 2023.
However, some progress has been observed since the late 1990s in certain areas, with improvements noted in employment rates and enhanced economic productivity in cities such as Manchester. The report highlights that job growth has become more concentrated in historically low-employment regions, and local wage disparities have decreased, partly due to an increase in the minimum wage.
Specifically, Manchester experienced a substantial real-term growth in gross household disposable income per person, rising by 40% from 1997 to 2023. Nevertheless, the city’s income level of £16,500 still lags behind London and other major northern cities like Sheffield, Newcastle, and Liverpool.
Burnham has articulated his vision of “Manchesterism” as a guiding principle for his political agenda, asserting that he can replicate the city’s economic recovery on a national scale through devolution, investments in transport and social housing, and enhanced public control over utilities.
Nevertheless, critics caution that the former mayor of Greater Manchester faces significant challenges in revitalizing the economy, particularly given the constraints on public finances. The Resolution Foundation stresses the need for consistent investment, pointing out that while Germany has invested around £70 billion annually for 25 years in post-Cold War economic integration, the UK allocated only £4 billion for its “levelling-up” initiatives in 2022.
Ruth Curtice, the Foundation’s chief executive, remarked that Manchester’s economic resurgence demonstrates that “decline is not destiny,” but highlighted that the major cities in Britain continue to underperform. She noted, “PM-in-waiting Andy Burnham has rightly prioritized regional inequality. Yet, translating ambition into reality will necessitate investments in transport, housing, and overall economic development at a scale that no recent political leader has approached.” Curtice concluded by warning that without serious investment, the economic and political repercussions of Britain’s regional divides will persist.
