The North/South divide

The Institute for Public Policy Research has released details of a forthcoming study which shows that the North-South divide has grown during 10 years of Labour government:

ippr north’s report cites Government figures that measure the gap
between regions. These figures show that since 1997, the North East,
the North West, Yorkshire and Humberside and the Midlands have all
moved further away from the national average, on the Government’s
favoured measure of output per head (known to economists as ‘Gross
Value Added’). Over the same period, London has out paced the rest of
Britain. (ippr)

The figures in the release also appear to show that the positions of Scotland, Wales, and Northern Ireland have deteriorated slightly as well.

Gross Value Added (GVA) per head by region

According to the OECD, the regional disparities in the UK are now some of the largest in the developed world.
Labour’s economic policies have benefitted London and the south-east of England most, and it has managed the resulting disparities through redistribution, leading to much higher rates of public expenditure and public sector employment in the poorer regions.

The election of the new administrations in Scotland, Wales and Northern Ireland arguably represents the beginning of a paradigm shift away from the state of affairs. They are all seeking new powers to develop more competitive economies, implicitly moving away from the fiscal solidarity that has underpinned the Brownite model of redistribution.

Perhaps the most uncertain issue is where this trend leaves the English regions. The cause of regional devolution in England has been hamstrung by the fact that it has been perceived as an attempt to finesse the West Lothian Question. Even if regional assemblies were to come about, it’s hard to see them assuming the same powers that Holyrood, Stormont and Cardiff are seeking.