UK regional household income divide remains unchanged in 30 years, report reveals

A report by the Resolution Foundation reveals that the UK regional household income divide has remained largely unchanged over the past 30 years. Despite various government pledges since 1997, the income gap between the richest and poorest areas has persisted, highlighting ongoing economic disparities.

Stagnation in Household Income Disparities

The report indicates that gross household disposable income per person in London is currently £27,900, which is three-fifths higher than in Northern Ireland, where it stands at £17,300. In terms of specific regions, disposable incomes in the wealthiest area, Kensington and Chelsea, reached £60,584, while the income in the poorest area, Leicester, was only £13,398.

This significant gap of four and a half times highlights the entrenched divisions that have been consistent for nearly three decades. The report emphasizes that over half (54%) of local authorities in the poorest fifth for income per person in 1997 remain in that category today.

Challenges Ahead for Andy Burnham

As Andy Burnham prepares for his role as prime minister-in-waiting, he has committed to achieving “good growth in every postcode.” However, the Resolution Foundation warns that substantial investment in transport, housing, and regeneration projects is critical to address the long-standing issues of regional income disparity.

Burnham’s approach, referred to as “Manchesterism,” aims to replicate the economic revival seen in Manchester across the nation. However, critics argue that he faces significant challenges due to tight public finance constraints.

Investment Needs to Address Inequality

The report also highlights that while some progress has been made since the late 1990s, such as narrowing employment gaps and stronger economic growth in cities like Manchester, overall income levels remain significantly lower compared to London and other major northern cities.

For instance, Manchester’s gross household disposable income per person grew by 40% in real terms from 1997 to 2023 but still lags behind with a current figure of £16,500. The Resolution Foundation points out that while Germany invested approximately £70 billion annually for 25 years to rebalance its economy, the UK’s “levelling-up” spending was only £4 billion in 2022.

• Gross household disposable income per person in London: £27,900
• Gross household disposable income in Northern Ireland: £17,300
• Disposable income in Kensington and Chelsea: £60,584
• Disposable income in Leicester: £13,398
• Manchester income growth (1997-2023): 40%

“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.”