Regional inequality widens, as London outpaces rest of UK

According to data from the Office for National Statistics, London’s prosperity is rising significantly, as measured by its share of the national output, which has risen to 22.4 per cent since 2006.

This is reflected in higher average wages of £35,367 in London – compared to just £26,121 in Birmingham as at January 2014 – according to data analyst PayScale, and a 7 per cent rise in house prices in the capital from January 2013 to January 2014, higher than the national average of 6.3 per cent, figures from Rightmove have shown.

The ONS data showed that gross value added per head, the measure for economic productivity per individual, stood at £37,232 in London at the end of 2012, the largest figure out of any region in the UK, while the south east came second with £23,221 GVA.

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Despite a 2.5 per cent increase in GVA per head since 2011, the south east’s share of national output fell behind London at 14.6 per cent, with the north west in third place at 9.4 per cent.

The Equality Trust, a campaign aimed at tackling income disparity in the UK, has called on the government to use measures other than gross domestic product to analyse prosperity, given the rising concerns over employment, debt and lack of savings in the country.

Maddy Power, senior researcher and policy adviser at ET, said the political emphasis on growing GDP obscured Britain’s “unequal distribution of growth”.

Adviser view

Ruth Whitehead, director of London-based Ruth Whitehead Associates, said: “I see more homeless people sleeping rough, all of which suggests those who are claiming an economic boom in London are picking and choosing the evidence.”