A new PwC report highlights a stark North-South divide, finding that nearly half of UK households see no improvement in quality of life despite national economic growth.
Key facts
- •PwC defines spending power by calculating income after taxes and housing costs, adjusted for household size.
- •Scotland and the south west of England are exceptions to the regional trend, with spending power slightly above the national average due to lower housing costs.
- •The UK economy expanded by 1.2% during the first six months of this year.
- •PwC researchers argue that success should be measured by prosperity and opportunity rather than simple economic growth metrics.
- •The government has announced plans to grant English mayors a share of income tax revenues to support local public services.
A report from consultancy PwC reveals that 12.5 million households, or 46% of the UK population, live in areas where economic growth fails to translate into improved living standards. The findings highlight a significant North-South divide, with regions in the north of England, the Midlands, and Wales consistently recording lower household spending power than the national average.
By the numbers
Regional disparities in spending power
The report indicates that households in the north east of England have 6.6% less spending power than the national average, a deficit of £1,542 annually. Yorkshire and the Humber face the largest gap at £1,917 below the average. Conversely, households in the South East possess 9% more spending power than the national average, amounting to an extra £2,154 per year. Researchers noted that even within affluent areas like London, significant disparities exist, citing a nearly twofold difference in average disposable income between Richmond and Hammersmith and Fulham.
Political debate over growth strategies
Prime Minister Andy Burnham has pledged to address these regional inequalities through devolution and the creation of 'No10 North,' aiming to empower local authorities to retain more revenue. However, the government faces constraints due to rising borrowing costs ahead of the October Budget. Conservative leader Kemi Badenoch has criticized the Prime Minister's approach, labeling the establishment of No10 North a 'gimmick' and arguing that increased government spending will not inherently lead to greater national wealth.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by BBC Business.
