UK income gap reveals the story of two Britons


The Resolution Foundation examines the income gap between different parts of the UK. Photo: Kristian Buus/In pictures via Getty

Britain’s income gap has revealed rich and poor hotspots after researchers uncovered stark economic inequality across the country as households face the toughest Cost of life pressing since the 1970s.

New analysis from the Resolution Foundation and the LSE, funded by the Nuffield Foundation, has found that incomes in the UK’s wealthiest region, Kensington and Chelsea, are 4.5 times higher than in the wealthiest region. poorer, Nottingham.

The study released on Monday says Britain is plagued by “persistent economic gaps” between different parts of the UK. Dealing with it “requires investment” in major cities on a scale “not currently envisaged”, he said.

“Four-fifths of the variation in income between local authorities is explained by the 1997 trend, with only traditionally poor areas of central London like Hackney and Newham changing their positions significantly,” the report said.

Despite this, it suggests that income inequality has not increased, but the ‘lack’ of overall income change masks growing gaps in investment and self-employment income, driven by wealthier households in London and the UK. South East.

By contrast, income and employment gaps have narrowed, with the average gap between the UK’s highest and lowest employment areas shrinking by almost a fifth since 2000.

Experts have said that reducing “geographical disparities” requires additional measures to tackle other persistent inequalities such as age, gender and ethnicity.

“Reducing large and persistent geographic inequalities in income requires investments to make more places attractive for jobs and highly skilled workers, although this does not necessarily improve outcomes for less skilled workers,” said said Alex Beer, social welfare program manager at the Nuffield Foundation.

“Tackling geographic inequality is important, but even wealthy parts of the country can still have some of the highest poverty rates.”

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A separate study suggests that productivity gaps have also widened. Productivity of £76,000 per job in London is double that of Powys and Torbay.

The Resolution Foundation said this was due to the transition from an industrial to a service-based economy, where highly productive economic activity is more geographically concentrated, and the failure of major cities outside London to succeed in this transition.

This means that the productivity gap between London and Manchester (30%) is much higher than that between Paris and Lyon (20%), contributing to Britain’s large productivity gaps and poor overall performance.

Researchers say increasing productivity in major UK cities in the 21st century is possible and would bring ‘broad benefits’ as 69% of the UK population live in cities or their hinterlands, compared to 56% in France and only 40% in Italy.

But that would require focusing on the drivers of growth in a service economy that have become more important in recent decades, increasing the stock of capital, the share of graduates and the size of the local economy, the report says. .

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Lindsay Judge, research director at the Resolution Foundation, said: “Britain has been plagued by huge economic gaps between different parts of the country, and has been for many decades.

“While progress has been made in closing employment gaps, this has been offset by increased investment income among the wealthiest families in London and the South East.”

Henry Overman, Professor of Economic Geography at LSE, added: “Those looking for Britain’s productivity problems may find them in our underperforming big cities.

“Addressing this challenge will force Britain to completely reverse its poor record on investment, make rash decisions about where to prioritize that investment and for cities to embrace growth.”

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