Spending power divide revealed

The IPPR North thinktank has looked at differences in disposable incomes
The IPPR North thinktank has looked at differences in disposable incomes
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THE SCALE of the challenge to close the North-South divide on living standards is revealed in new analysis showing Yorkshire families have some of the lowest disposable incomes in the country.

According to the latest figures, the average disposable income in Yorkshire is £15,252 compared to £17,559 nationally and £22,516 in London.

Only the North-East, Northern Ireland and Scotland have lower disposable incomes than Yorkshire, according to the IPPR North thinktank.

Its analysis also lays bare the stark differences between parts of Yorkshire just a few miles apart in the amount of money people have to spend.

North Yorkshire is credited with an average disposable income of £18,969 while in Hull the figure is just £13,046.

IPPR North has produced the figures as the Government looks to put its ‘Northern Powerhouse’ plan into action to grow the economy of Yorkshire and its neighbours and rebalance the UK economy away from its reliance on the South-East.

Luke Raikes, research fellow at IPPR North, said: “Correcting the imbalances in our nation’s economy is about more than just stronger economic growth figures or faster journey times – we have to improve the quality of life and incomes of people in the North too.

“These figures show the Northern Powerhouse has a long way to go before people in the North feel the benefit of a stronger regional economy.

“The North should pursue growth and prosperity built on higher wages, more jobs and stronger productivity – not simply try to catch up to London and the South East, where the type of economic growth they’ve experienced has created high levels of inequality and left many behind.

“IPPR North has shown how Northern prosperity can create national prosperity: if we increase household wealth to the OECD regional average, then every household will be nearly £500 better off each year.

“But without a step change in policy the North will not be able to escape the historic under performance of its economy, and contribute more to national growth.

“The Northern Powerhouse will be meaningless for the people who live and work in the North unless the economic growth it generates reaches their pockets.”

The IPPR North figures show that parts of Yorkshire dominate the bottom of a league table of UK disposable incomes.

Barnsley, Doncaster, Rotherham, Hull and Bradford are ranked between 149 and 167 on a list of 173 UK districts.

North Yorkshire was the only part of the region to be above the national average and to make it into the top 50 districts across the country for disposable income although the East Riding is close at £17,025.

Out of 41 districts in the North of England, 36 were below the national average.

In better news for Yorkshire, the region has seen a significant bounceback in disposable incomes since the recession.

Average disposable incomes in Yorkshire have risen by nine per cent, or £1,254 in cash terms, since 2009 although this is still less than the UK average of 9.3 per cent.

The Northern Powerhouse is George Osborne’s vision to better connect the towns and cities of the North so together they can compete in the global economy.

It includes the offer to hand over Government powers in areas such as transport, planning and skills to places that agree to have elected mayors.

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