It isn’t just the break-up of Britain, what about the break-up of England?
Nearly two years into the recovery, it seems much more of a reality in some parts of the country than others. Today, two stories throw a light on the UK’s economic story. The Financial Times has a story based on analysis by rating agency Standard and Poor’s that looks at mortgage arrears and negative equity. (I can’t find it on the S&P website and you may be held up by the FT paywall, if you can get to the FT story you’ll be rewarded with a really first-rate graphic.) This shows that there’s a regional divide in mortgage risk: in March, 8.5% of loans in the North of England were in negative equity, coimpared with 2.5% in the South and Northern borrowers were a third more likely to be behind with mortgage payments (up from 25% in a similar exercise last year.)
Mark Boyce, S&P’s credit analysis predicts that the cuts will make this worse:
We believe that the UK coalition government’s budgetary retrenchment could exacerbate this north-south divide. Due to the north’s greater dependence on government employment, we anticipate that unemployment in those regions – and consequently arrears – could escalate.
He adds that “although private sector job creation has offset public sector consolidation over the past year, about three-quarters of the new headcount has been in southern regions.”
The other indicator is today’s Labour Market Outlook from the Chartered Institute for Personnel and Development, which says that employers see “stark sectoral and regional differences.” The outlook is pretty depressing for all of us – nationally, the measure of forecast net job creation has turned negative, with expectations in the private sector much weaker, especially in manufacturing. But the regional disparities hidden by those overall figures are especially worrying:
The three-month net employment balance for the south of England is +10 across all sectors, while the balance for the north is -6.
If we add to the mix the harsher impact the cuts will have in the North, I think it is inevitable that more and more people will feel they have an uncaring national government mainly elected in the South. If this happens, it will have political consequences.