British regional economic divide narrowing, says study

The economic divide between the North and South is beginning to close, a new study has suggested.

Research into the competitiveness of companies in different regions of the UK showed the first “compelling evidence” that the gap was closing, it was claimed.

For the first time since the so-called competitiveness index was launched six years ago, London, the South East and eastern England all registered a fall, while the traditionally least competitive areas of the Northern Ireland, Yorkshire, Wales and the North East all showed big improvements.

Dr Robert Huggins, who compiled the index, said: “For as long as most of us can remember, the story of the UK's economic performance has been a tale of two nations - the go-ahead London and south-east region and the north and west of the country stuck in the doldrums of post-industrial blight.

“It is a hugely positive development that the (British) government's devolution and regional development policies may at last be bearing fruit. Whilst there may be more that policymakers can do to devolve power - for example to cities and city regions - the signs are that strategic development through devolved institutions and regional development agencies is starting to make a difference.

“Targeted regional investment appears to reduce unemployment and lift regional competitiveness.”

London has remained an economic powerhouse. Out of the top 25 most competitive localities, 23 were in the capital and the South East.

Ian Brinkley, director of the Work Foundation, which helped with the research, said: “There are very positive signs here that the gap in regional economic performance is starting to close and regional policy decisions are beginning to pay dividends. Yet a little caution is needed because the index reflects only one year's data.”