Powerhouse blow as Yorkshire workers face low-pay misery

None of Yorkshire’s cities are currently delivering the “high wage, low welfare” economy the Chancellor has vowed to create in the UK, according to analysis by a leading think tank.

Hull is at the top of a league table of “low wage, high welfare” cities where the average weekly wage is £376 and the Government spends £3,769 per person on state support.

With a typical weekly wage of £431 and a welfare spend of £3,525 per person, Doncaster is also in the top ten which is dominated by places in the North.

Despite Government cuts, welfare spending has increased in the vast majority of Yorkshire’s cities and large towns and workers have faced cuts in their income since 2010.

In real terms, the average wage has fallen across Yorkshire cities from a cut of £936 in Bradford to £1,560 in York.

At the other end of the scale, London, Reading, Aldershot, Aberdeen and Milton Keynes were among those with a high wage, low welfare economy.

Cities with high wages had seen the fastest jobs growth. The data published today shows workers in Leeds enjoy the highest average weekly wage at £517, ranking the city 15 out of 63 analysed by Centre for Cities.

The Centre for Cities report, published today, warns the introduction of the national living wage this April will not tackle the underlying reasons why incomes are low in this region.

And in a stark warning for the Chancellor, the report says that cities which have seen large numbers of jobs created have not enjoyed automatic falls in welfare costs as demand for housing drives up housing benefit bills.

It suggests the Government’s ‘northern powerhouse’ initiative to create a stronger economy in the North has not focused enough on improving skills and calls for more local control of welfare budgets to give council leaders and soon-to-be-created elected mayors more incentive to focus on increasing employment.

Alexandra Jones, chief executive at Centre for Cities, said: “One of the most pressing issues is the need to tackle skills-gaps and improve schools attainment, especially in low-wage cities, to help those places attract businesses and jobs, and support more people to move into work, particularly in high-skill sectors.

“This should be a key part of the Government’s Northern Powerhouse initiative alongside investment in infrastructure, and a top priority for local leaders. For cities which have seen strong growth in wages and jobs, the focus should be on addressing housing shortages, to ensure that their success isn’t derailed by a lack of affordable homes.

“Cities also need more powers and incentives to boost jobs and wages. Giving places control over skills and welfare budgets, and allowing them to keep any savings made by reducing the welfare bill, would incentivise local leaders to invest in employment programmes that, if successful, would reduce people’s need for benefits payments.

“Further devolution would also enable local leaders to make spending decisions which better meet the needs of their communities and give them more incentives to drive economic growth.”