Persistent wage gap between North and South

09.08.22

New analysis of ONS data by NPP has found stubborn wage and productivity gaps between North and South.

In 2021 the median full time salary for people living in London was £37,500 – more than £8,400 higher than in the North (£29,096). The income gap between the North and the wider South East was roughly £4,900.

The income gap with London has been relatively consistent since 2002, with residents in the capital earning around a third more than their counterparts in the North on average. This did narrow slightly in 2021 but this could be due to the impact of the COVID-19 pandemic on the economy.

The region with the lowest median earnings across all of the UK was the North East at just over £27,600 in 2021.

Our analysis of ONS regional productivity data also found that London and the South East was 40% more productive than the North (2020 data).

_{Current Price GVA per hour worked, local authority districts, Great Britain, smoothed, 2020, UK=100 | ONS}

Between 2004 and 2018, productivity increased 12% in London, 16% in the South East – but only 4% in Yorkshire & the Humber, 10% in the North West and 9% in the North East.

In 2020, productivity in London and South East was 23% above UK average. The North’s productivity was 12% below the UK average.

Henri Murison, Chief Executive of the Northern Powerhouse Partnership said: “The North-South divide is a deeply-rooted issue which has persisted stubbornly for decades – and it’s holding growth back for the whole country.

“Higher productivity means higher wages and better living standards. If the next Prime Minister is serious about tackling the cost-of-living crisis and levelling up, they need to harness the huge untapped economic potential of the Northern Powerhouse to create better-jobs across our regions. 

“We can’t let levelling up go into free fall just a few months on from the White Paper. It’s time to get back to that ambitious mindset where we see the North as a serious economic opportunity, which could eventually act as a counterweight to London, or we risk failing generations of young people growing up here.”