Large income gap across country report warns

Regional disparity growing says JRF
Regional disparity growing says JRF

Average household incomes in the South East are almost 25% higher than in the West Midlands according to a major new analysis of poverty and inequality.

The report found that average incomes in the West Midlands, East Midlands, northern England and Wales were no higher than incomes in the South East in the late 1990s.

The Institute for Fiscal Studies (IFS) also identified weak earnings growth - with employment income in 2015-16 lower than its pre-recession levels - as “the primary reason for the malaise in living standards” in the UK.

The IFS analysis showed that the median weekly income net of taxes and benefits for a childless couple in the West Midlands over the three years from 2013-14 to 2015-16 was £427.50 before housing costs, or £370.07 after housing costs.

For the South East the figures were £531.89 before housing costs or £454.62 after housing costs.

The report was funded by the Joseph Rowntree Foundation, whose chief executive Campbell Robb described the findings as “alarming”.

The analysis showed:

:: Average incomes in the south of England (excluding London) and Scotland have grown faster than in Britain as a whole over the last 40 years. Southern England is now 13% above the national average, compared to 7% in the 1970s.

:: One in four poor children live in the most deprived 10% of local authorities.

:: Inequality remains lower than before the Great Recession, with the main reduction between 2007-8 and 2011-12 due to rising benefit income and falling real earnings.

:: But income inequality is likely to increase over the coming years if earnings grow and planned benefits cuts “significantly reduce the incomes of low-income working age households”.