Smart Thinking

We need more than blanket promises to redress inequality

Policy Makers need to look beyond London if we're to have any hope of reuniting the country

Words by
Edward Davies

It’s 310 years since the Acts of the Union passed in England and Scotland, making the United Kingdom. That collaborative moment seems to become more distant with every Nicola Sturgeon speech.

The ever-dawning reality in much of Scotland’s displeasure is a symptom of a wider problem: this kingdom is no longer united. It’s not united because it’s not equal. Nowhere near. There’s an unequal relationship, not just between nations, but between cities, towns, and villages. The scale of the inequality should be unpalatable to us.

It’s not about income: The Institute for Fiscal Studies released data in July showing the gap between rich and poor, the top and bottom 10 per cent of earners, fell during the financial crisis, and has remained steady since.

“The feeling that we’re a divided country isn’t a grievance. It’s true”

But inequality of opportunity is driving division between Scotland and England, North and South, Leave and Remain, town and country. There’s a them-and-us mentality.

Perhaps more uncomfortably, the greatest inequality is both within London, and between London and pretty much everyone else.

For example, London and the South East created 45 per cent of all new jobs across the UK between 2004 and 2016, with London creating a third of the jobs by itself. Median weekly earnings are about 20 per cent higher in the capital than the North of England.

More concerning is productivity, the economic measure which underpins our potential for wage growth and improved quality of life. According to the Office for National Statistics, London’s average productivity ‘GVA’ (a measure that looks at ‘gross value added’ output, not just salaries) is £42,666. Wales has the lowest level of per head productivity at just £17,573.

These shouldn’t just be shock-inducing figures. If you live in these areas they represent the relative likelihood of your life being better than your parents’ and your chances of a pay rise next year.

Inequality starts well before the world of work. Educational attainment is particularly low in the suburbs of de-industrialised towns across the North East and North West. For example, Knowsley, on the outskirts of Liverpool, saw just 10.5 per cent of students achieve five A*-C grades at GCSE in 2016, but given you can’t even sit an A-level in the area, you could say it’s academic anyway.

“There is a solution. Economic policy must encourage businesses and entrepreneurs beyond the M25”

Innovation and enterprise is geographically skewed too. Analysis data by the Centre for Social Justice of the Government’s Intellectual Property Office (IPO) on patents shows almost a fifth of new patents are registered in London and the South East. By comparison, the North East only registered 1.8 per cent. Hardly surprising given almost a third of public expenditure on science and tech in 2014/15 was directed to London and the South East.

Put all of this together and the feeling that we’re a divided country isn’t a grievance, it’s true. Opportunities to learn, earn, and innovate depend entirely on where you live. We live completely different existences from each other.

We know worklessness can become generational, addiction destroys communities, and crime is both perpetrated and suffered most by our poorest communities.

But there is an answer. If inequality is driving division, the answer is to increase equality of opportunity. Economic policy must encourage businesses and entrepreneurs beyond the M25. We need to give people skills and training to ensure they can thrive, wherever they live. Schools don’t need blanket national promises, they need targeted interventions. When we don’t invest in our most vulnerable, it harms us all. For the sake of unity, why wouldn’t we want to invest?

Edward Davies is Policy Director at the Centre for Social Justice