This government's leveling-up plan has failed: households have lost £1,300 a year since 2015.
There are some in the UK Inequality among OECD regions highest. Successive prime ministers have promised to correct this problem. But our analysis at NEF found that we are going backwards when it comes to regional inequality. Households in the north of England have been hardest hit, with annual income losses of more than £1,300 since 2015.
To understand how things got worse across regions, we broke down changes in household income into different periods. Regional divisions in the modern British economy have existed for decades, but were exacerbated by the policy choices of David Cameron and Theresa May between 2015 and 2019 .The income limit for families receiving Social Security benefits is Tighter restrictions and new eligibility rules. These changes exacerbate existing regional inequalities, as poorer areas are first and foremost more dependent on social security.
Furthermore, cuts to public services are making us all poorer Squeeze public sector wages. The continuation of austerity policies spills over into the wider economy in the following forms: Reduced demand and insufficient government investment, Exacerbating the productivity crisis Keep private wages low.
Our results show that average household income in the North East fell by almost £1,000 between 2015 and 2019. In contrast, households in the south-east and east of England fared slightly better, with average increases of £130 and £180 respectively.
Figure 1: Regions became more unequal under David Cameron and Theresa May
2019, Boris Johnson elected and promised Number“National level improvement” – means improving the economic prospects of previously impoverished areas. However, reality does not match the rhetoric. Instead, inflation outpaced wage growth across the board, making households poorer in all regions.Contributors to this government are Deny public sector workers real pay rises By continuing to underinvest in the economy, it cannot prevent prices in both the public and private sectors from rising faster than incomes, leaving everyone worse off. Our results show that annual household income has fallen by around £800-1,000 in each area since Johnson came to power in 2019. Combined with the losses in 2015, households in many areas, including all of northern England, saw their annual incomes drop by more than £1,300 compared with 2015.
Figure 2: Available in all regions Number““Downgrade” under this government
Last week, the Chancellor made his Autumn Statement, which included tax cuts, which will only further expand Regional divide.Jeremy Hunt cuts National Insurance from 12% to 10%, a move that means richer areas of the UK will get bigger tax cuts as Tax cuts are more valuable to those who pay more in taxes. The comprehensive policy changes in the Autumn Statement will be worth £580 to the average household in London, but just £350 to those in the North East.
This government has Strict rules In terms of how much it can borrow, tax cuts mean less revenue for the Treasury.These tax cuts are only possible under government debt and borrowing rules because The Office for Budget Responsibility (OBR) expects inflation to be higher than before – Increase forecast tax revenues without increasing public spending.So these tax cuts are essentially Funded by real-term cuts to public services. While households may gain hundreds of pounds, this will come at the cost of lower quality public services in the future, potential further cuts to public sector pay and the wider negative impact of austerity on the economy.
Figure 3: Jeremy Hunt’s tax cuts mainly target wealthier areas
Despite the government's claims to revitalize economically disadvantaged areas, the situation in these places has only gotten worse. The current government could have chosen to increase take-home income in poorer areas by: Increase social security payments, Increase public sector wagesand Invest in green industries. Rather than making the country more equal, their choices make us all poorer.
Table 1: All households worse off after latest autumn budget
Breakdown of changes in household disposable income by UK region between April 2015 and April 2024 (GBP, 2024/25 prices, rounded), before and after April 2019, and before and after the Autumn Statement policy announcement (budget changes).Overall changes since April 2015/2019 and April 2024 following the fall reporting changes also include.
| 2015 – 2019 | 2019 – 2024 | Budget changes | Overall changes 2015 – 2024 | Overall changes 2019 – 2024 | |
| northeast | – £960 | – £740 | £350 | – £1,350 | – £390 |
| northwest | – £450 | – £910 | £390 | -£970 | -£520 |
| Yorkshire and Humberside | – £460 | -900 pounds | £360 | – £990 | -530 pounds |
| east midlands | -£240 | – £930 | £390 | – £780 | -540 pounds |
| west midlands | – £490 | -£840 | £370 | – £960 | – £460 |
| East | £180 | -£870 | £490 | -£210 | – £390 |
| London | -500 pounds | – £790 | £580 | – £710 | -£210 |
| southeast | £130 | – £1,020 | £520 | – £370 | -500 pounds |
| southwest | – £420 | – £990 | £450 | – £950 | -530 pounds |
| wells | – £400 | – £710 | £350 | – £760 | – £360 |
| Scotland | – £350 | -600 pounds | £410 | -550 pounds | -200 pounds |
| Northern Ireland | – £360 | -£830 | £410 | – £780 | – £420 |
Source: NEF analysis of Household Resources Survey using IPPR welfare model, April 2024 data using data from latest OBR forecasts.
Because income in the FRS is unreliable, the lowest 5% of income earners are eliminated.
Picture: iStock
