North East incomes falling behind since Boris Johnson's election, think tank finds

Boris Johnson gives a speech at the Port of Tyne Credit: PA

Households in the North East have experienced the smallest disposable income growth in the country since Boris Johnson's election, according to analysis by a left-of-centre think tank.

The New Economics Foundation (NEF) found that since December 2019, average net income in the region rose by less than £20 per year (or under 0.1%).

Over the same period, the poorest 50% of North East families saw their income decline by over £250 per year on average.

Meanwhile, disposable real incomes in London increased by more than £600 per year (1.3%) and by £550 (1.1%) in the South East.

The wealthiest 5% of households nationwide are richer by £3,300. The poorest 50% are worse off by £110.

Authors of the analysis say the figures suggest the Government's promises of levelling up are "far from" becoming reality, and that wealth inequality is rising.


The North East:

Nationwide:

London - The best performing region:

  • All figures obtained by NEF analysis using the IPPR tax and benefit microsimulation model, based on data from the DWP Family Resources Survey and various OBR and Bank of England forecasts data.


The NEF argue the "sharp increase in inequality has been driven by the decision made by government in their policy response to Covid-19" - particularly "consecutive failures to lock down in time" and inadequately protecting those on fixed-term contracts or in self-employment.

“Far from ‘levelling up’, on this prime minister’s watch the families and places that were already poorest have fallen even further behind the rest of the country," wrote NEF's Dominic Caddick and Alfie Stirling.

"The overall picture of ​‘winners’ and ​‘losers’ is stark...This sharp increase in inequality has been driven by the decisions made by government in their policy response to Covid-19.

Boris Johnson has previously referred to reducing regional inequality as the "greatest project that any government can embark on", calling the UK economy the "most imbalanced and lopsided of all the richer countries".



Responding to ITV News Tyne Tees' request for comment, a government spokesperson said:

"This Government’s central mission is to level up every part of the United Kingdom by spreading opportunity, empowering local leaders and improving public services.

"In addition to the £4.8 billion Levelling Up Fund, we’re providing record investment in infrastructure worth over £96 billion, £12 billion in affordable housing and a £2.6 billion Shared Prosperity Fund to help rebalance opportunity across the UK.

"We are widening access to new jobs - 56,000 just this year - and we’re building on that through a £200 million boost to communities to help build skills. The forthcoming Levelling Up White Paper will set out how we will further improve opportunity and livelihoods across the country as we recover from the pandemic."