From the TUC

For the last two years London per capita income was DOUBLE the rest of the UK

15 Dec 2016, by in Economics

Despite all the rhetoric about rebalancing and powerhouses, new regional figures show how far London has moved from the rest of the country.

In 2014 and 2015 gross value added (GVA) per capita was more than double in London compared to the average over the rest of the UK. In cash terms: £43,600 against £21,600 (to three significant figures).

[NB GVA is the standard measure for regional comparisons, just as GDP is the measure at national level. The ONS do not publish a excluding London figure, which is derived as a simple average across all other regions/countries.]

This doubling happened for the first time in 2014. Over the early 2000s the London lead was reduced. The 2007/2008 financial crisis was made in London (and other global financial centres): in a grotesque injustice the aftermath of the crisis has seen London pulling even further apart from the rest of the country.

Per capita income: London / rest of the UK 

reggva_15_1

This is not to say everyone in London is reaping the rewards. We know of all UK regions/countries, the fall in real earnings in London (at -9% over 2008 to 2016) was second in severity only to the West Midlands (-10%). The ONS figures today are based on GVA which also includes profits and rents, which plainly benefit a more narrow section of the London population.

But it is clear that the rest of the country is very much not reaping the rewards. The political consequences of this severe and growing inequity was manifest in the referendum vote (as I argue here). It should be a matter of the greatest priority not only for immediate action but as part of deeper thought into the nature of prosperity and economic activity over many decades.