Unveiled research highlights significant disparities in wage distributions across geographical areas
The Centre for Cities' latest report, 'Cities Outlook 2025', has drawn attention to significant wage disparities across the UK, with London workers earning nearly £20,000 more annually than their counterparts in some of the lowest-paid regions, particularly in the North[1]. This substantial wage gap underscores the ongoing regional economic divide.
Key findings from the report reveal that London, with its concentration of high-value industries and economic opportunities, leads in wages. Conversely, the North and other low-wage regions face persistent challenges in closing this gap, which impacts local living standards and economic performance.
The report delves into the drivers behind these wage differences, suggesting that targeted local and national policies are essential to raise living standards outside London. Addressing such disparities is crucial for balanced regional growth and reducing economic inequalities in the UK.
The report's insights underscore the need for strategic policy interventions aimed at boosting wages and economic opportunities in lower-paid regions. This is to reduce the stark North-South divide[1].
The average London worker effectively earns what it takes a worker in Burnley a year to make by August. In response, experts are urging the government to create more opportunities in towns with lower average salaries.
The study also shows that seven places in the rest of the country have salaries above the UK average, including Leeds, Warrington, Derby, Swindon, Bristol, Aberdeen, and Edinburgh. Reading and Milton Keynes are among the towns in the Greater Southeast with above-average salaries. Interestingly, out of the largest 63 towns and cities in the UK, nearly all those with above-average salaries are in the Greater Southeast.
The report also suggests bold changes to planning rules to deliver more housing in expensive areas and cities where it's needed most. These reforms, as per the government's growth ambition, are set to be a focus in 2025.
Andrew Carter, chief executive of Centre for Cities, calls for boldness, urgency, and scale in addressing economic growth and wage disparities across the UK. He emphasises the need for the government's Industrial Strategy to prioritise growing the cutting edge of the economy.
However, the report does not provide a detailed breakdown of causes or specific policy recommendations. Nevertheless, the emphasis is clear: the scale of the wage gap necessitates policy focus on raising standards outside London.
[1] Centre for Cities (2021). Cities Outlook 2025. Retrieved from https://www.centreforcities.org/publications/cities-outlook-2025/
- The report from Centre for Cities highlights the need for policy regeneration, particularly in finance and business sectors, to address wage disparities between London and the North, with housing policy playing a key role in reducing economic inequalities.
- To drive balanced regional growth and close the North-South wage gap, the government should prioritize policy interventions aimed at boosting economic opportunities in low-wage regions, as proposed by the 'Cities Outlook 2025' report.
