All parts of UK hit by economic stagnation since 2010, says think-tank

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All parts of the UK have suffered from economic stagnation since 2010, according to research that shows households in some of the richest and poorest cities have been similarly hard hit.  

The report by the Centre for Cities think-tank, published on Monday, charts the failure of successive Conservative governments in the wake of the financial crisis to boost urban economies, lift productivity or narrow regional divides.

“Everywhere has done poorly . . . The plethora of initiatives launched under the banner of rebalancing . . . or levelling-up have not made much of a difference,” said Paul Swinney, the think-tank’s director of policy and research.

This meant that in an election year, when the government was hoping to convince people that the past 14 years had been a success, “MPs knocking on doors will be talking to people who have missed out on thousands of pounds because of the malaise of the economy,” he added.

Most cities and large towns have seen strong employment growth since 2010, but it has been strongest in London, according to the report, so an even larger share of jobs are now clustered in and around the capital.

Because more people have moved into work there, households’ disposable income has also risen more in London than elsewhere — but still far less than it would have done if living standards had continued to improve at the pace that was typical before 2010.

Swinney said flatlining productivity in London was “particularly alarming” as the capital and its surrounding region had previously been the engine of national productivity growth.

But poor productivity growth has held back wages almost everywhere — both in centres of cutting-edge innovation and in northern cities suffering persistently high levels of deprivation.

The Centre for Cities said that since 2010, the average person in Cambridge had lost out on £21,340 in total compared with the income they could have expected if pre-2010 trends had continued, while the average for Milton Keynes was a loss of £21,610.

In Burnley — where incomes are much lower in absolute terms — the cumulative shortfall was £28,090, while in Glasgow it was £23,500.

Meanwhile, average per capita income has fallen outright in Aberdeen — previously one of the UK’s most prosperous cities — where the decline of the North Sea oil and gas sector has hit retail and housing as well as jobs in the industries directly affected.

In the handful of places where income growth had accelerated since 2010, the main explanation was earlier underperformance, the Centre for Cities said.

“The UK hasn’t struggled to create jobs, which is very welcome. It does, however, appear to have struggled to generate ‘good’ jobs,” the report said. It noted that an increase in in-work poverty in almost all cities meant the problem was now a national one, and no longer confined to the south-east.

The government said: “We are committed to levelling-up every corner of the UK, investing billions to support community regeneration projects, connecting 25.7mn premises with gigabit broadband and over 50 per cent of England is now covered by a devolution deal.”

The Labour party seized on the findings, with deputy party leader Angela Rayner declaring that “the Tories’ 14 years of failure [had] seen our country levelled down with people left worse off”.