Living standards have risen since the financial crash - in the north

The south was hit by the downturn, but the north-south divide is still very real.

by Rachel Savage
Last Updated: 27 May 2015

Britain’s north-south divide is a truth universally acknowledged, but the details of the story are, perhaps unsurprisingly, a bit more complicated. Since the financial crash in 2008, living standards – one of the hot topics of the election - have actually risen the most in the north east, while plunging in the wealthier south east.

The research, by think tank the Resolution Foundation, found median household incomes had fallen 0.4% across the UK as a whole between 2007-8 and 2014, taking into account inflation. That fits neatly with Ed Miliband’s claim that economic growth isn’t being felt in people's pay packets – but the picture is actually very mixed.

They rose by £794, or 3.9%, to £21,374 in the north east, the biggest increase in both real and relative terms. Incomes also grew in the north west, Wales and Scotland as well as in the slightly richer regions of the south west and east of England.

The south east took the biggest absolute knock, with incomes dropping a swingeing £921 since the financial crisis - although at £25,911 it’s still the second wealthiest area in the UK behind London. Poor old Northern Ireland’s plunged 4% to make it the poorest region, as it suffered from employment 2% and wages an eye watering 13.4% below their pre-downturn levels.

‘To add to the confusion, the stark generational divide means that many working age households in the North East will have experienced a tighter squeeze in living standards than pensioner households in Northern Ireland,’ Resolution Foundation’s chief economist Matthew Whittaker pointed out.

‘The big variation in experiences between households means that voters will hear confusing messages on living standards that they may struggle to relate to.’

The north-south divide is still very much there, then, according to this research, although it’s not particularly straight or clear. It also indicates that neither the Tory tale of economic recovery nor the Labour lament for cash-strapped ordinary folk will be ringing true for everyone. No surprises then that the election is still anyone’s guess.

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