Exclusive: Guardian analysis highlighting regional imbalance raises troubling questions about who is enjoying UK's recovery
London's economy is doing even better after the banking crash than during the bubble – while nearly every other part of the UK has seen its economy shrink by comparison. Exclusive findings published by the Guardian show that London and the south-east are racing away from the rest of the UK at a pace that would have seemed almost incredible at the height of the financial panic.
During the boom from 1997 to 2006, London and the south-east was responsible for 37% of the UK's growth in output. Since the crash of 2007, however, their share has rocketed to 48%. Every other nation and region – with the exception of Scotland – has suffered relative decline over the same period. The upshot is about a quarter of the population is responsible for half of the UK's growth, leaving the remaining three-quarters of Britons to share the rest.
The research also shows that the UK's highest-earners have become relatively more prosperous after the crash, while many on middle incomes are being squeezed hard. In austerity Britain, the top 20% of earning households are enjoying 37.5% of all Britain's income growth, even after accounting for taxes and benefits.
These findings will embarrass the government, especially as they come shortly before the release of the latest GDP figures on Friday. Ministers are poised to celebrate news that the economy is at last enjoying strong growth, and may even have racked up its best quarter in 13 years. But the Guardian's analysis raises questions about who is enjoying Britain's growth and how sustainable it is, and will fuel the debate over who should bear the burden for an economic crisis that began in the Square Mile.
The Guardian's analysis is based on official measures of gross value added, often used to assess regional and industrial performance, and was conducted by the Centre for Research on Socio-Cultural Change at Manchester University.
The findings suggests that David Cameron has failed to meet some of his most important promises: on making Britain's economy less lopsided; on ensuring that the pain from its cuts would be fairly shared out; and that banks would lend more to small businesses.
In his first major speech as prime minister, Cameron described Britain as "more and more unbalanced, with our fortunes hitched to a few industries in one corner of the country". Analysis of the statistics shows that regional imbalance has grown sharply since the crash.
The chancellor, George Osborne, has repeatedly claimed that "we're all in this together". But while the highest-earning 20% of households have done well, and the fortunes of the bottom 20% have been boosted by the minimum wage, most of the rest – the so-called squeezed middle – have seen their incomes stretched.
Article Source : http://www.guardian.co.uk
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