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New report shows the regional divide growing under the Coalition

A new research report, edited by Hull North MP Diana Johnson, arguing that regional inequality has worsened under the Coalition Government is being launched today (20 March).

The Unions 21 report, entitled Rebalancing the Economy: New Thinking on Britain’s Regional Inequalities, argues that the regional divide has reasserted itself under the Coalition since 2010 because, despite ministerial rhetoric, little has been done to fundamentally rebalance the economy.

The report shows that UK regions worst hit by the global recession have also been the last to see any recovery from it.

The report argues that tackling regional inequalities would benefit every region of the UK – not just those that are the most disadvantaged – and should be a major priority for the next Government.

The report includes contributions from a range of trade unionists, think tanks and politicians. It also draws on opinion polling commissioned by Unions 21.

The report’s key findings and arguments are:

(1)    Some regions of the UK were hit harder by the recession than others. The proportion of NEETs increased faster in the North and West Midlands than it did in the South. Some UK regions lost more GDP per capita during the recession than others.

(2)    Meanwhile, the same areas are benefitting the least from the apparent “recovery”, as the Coalition has failed in their pledge to rebalance the economy.

National output, measured as Gross Value Added (GVA) per capita, which is similar to GDP, fell across the UK in 2007, but grew again in 2008. But its growth has not been equal across regions. Ian Brinkley of the Work Foundation argues that economic growth under the Coalition has been led by the service and banking sector.

(3)    Britain is regionally divided across a range of spheres – not just the labour market. The report looks at inequities in a number of other areas.

    Housing: Clive Betts MP notes a marked regional divide in housing policy. The North has much lower housing demand than the South and thus more sub-standard neighbourhoods. Meanwhile, the South has rocketing housing costs due to high demand outstripping the supply of new homes – two sides of the same coin. An economy with such a regional mismatch in job opportunities and affordable housing will not work efficiently.

    Creative economy: Equity highlights that there is a marked regional divide in the number of creative economy jobs, such as in the acting sector.

    Pay: This looks at analysis of House of Commons Library figures on the Living Wage in UK constituencies and finds a stark regional inequity.

(4)    Tackling these divides should be a priority for the next Government. The British public supports this – and it would benefit the whole UK. Unions 21 opinion polling, carried out by Survation, reveals that more voters across all sub-categories agree with the statement that “Britain is more regionally-divided than it was thirty years ago” than disagree with it. A majority (65%) also believe that a future government should prioritise rebalancing the economy.

Diana Johnson MP, Editor of the report, said: “This Unions 21 report shows that the Coalition has failed since 2010 in their pledge to ‘rebalance the economy’ and deliver growth that reaches every corner of the UK.

“British regions hit hardest by the global recession have been the last to feel the effects of the apparent ‘recovery’ – despite all George Osborne’s talk about a ‘Northern Powerhouse’.

“Our polling data shows that the British public agree that Britain is more regionally-divided than it was thirty years ago.  

“The only way to turn this around, and make rebalancing the economy more than a slogan, is to ensure that the whole country not only benefits from broad-based economic growth, but contributes to it as well.

“We need a clear commitment to reduce regional inequalities on numerous fronts - from the labour market to health, from housing to the creative economy.

“In a nutshell, it means steering a fundamentally different path from the downward spiral of wasted talent, low pay and low skills that I have seen in Hull under the Coalition.

“It means investment in technical skills and modern apprenticeships to prepare local people for the jobs of the future.

“It means a fairer distribution of investment in regeneration, public services and infrastructure than we have seen since 2010.

“It means devolving power – not just blame - to regions so that they can build their own prosperity, as we fought to do in Hull around green energy, rather than waiting on decisions from Whitehall.  

“It means not denigrating the public sector as an enemy of growth and productivity, when we are all allies in interdependent local economies.

“It means doing more to steer the UK economy away from an over-reliance on the service sector, the City of London and the South East property bubble.  

“This is not a case of South versus North, or even London versus the rest. Regional inequality and unbalanced growth holds back and limits the whole country’s potential for growth.

“The problems of the North, of the South West and of Wales’ are not narrow, regional issues - they are Britain’s problems.

“Only by tackling these issues together on a long term basis, as one nation, can future governments bring growth and opportunity to every corner of the UK and create a higher growing, more resilient and more efficient UK economy overall.”

The report can be read in full at

Diana Johnson MP has also written articles on regional equality at, and


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