IPPR - From Powerhouse to pockets: Northerners have £2,300 less disposable income than the rest of the country

11 Aug 2015 12:33 PM
The Northern Powerhouse has a long way to go before the benefits are felt in the pockets of people living in the North, according to new analysis by IPPR North today.

Analysis of official figures by the think tank show the gap in ‘gross disposable household income’ – the money people have available for spending or saving – between the North and the rest of the country.

Using the Office for National Statistics data, IPPR North found:

While the Government’s Northern Powerhouse agenda is welcome, IPPR North says a key test of its success must be how it translates into higher living standards for people living and working in the region.

It says central government and combined authorities should coordinate policies in areas like skills and transport infrastructure to create stronger local economies.

Luke Raikes, research fellow at IPPR North, said:

“Correcting the imbalances in our nation’s economy is about more than just stronger economic growth figures or faster journey times – we have to improve the quality of life and incomes of people in the North too. These figures show the Northern Powerhouse has a long way to go before people in the North feel the benefit of a stronger regional economy.

“The North should pursue growth and prosperity built on higher wages, more jobs and stronger productivity – not simply try to catch up to London and the South East, where the type of economic growth they’ve experienced has created high levels of inequality and left many behind.

“IPPR North has shown how Northern prosperity can create national prosperity: if we increase household wealth to the OECD regional average, then every household will be nearly £500 better off each year.

“But without a step change in policy the North will not be able to escape the historic underperformance of its economy, and contribute more to national growth. The Northern Powerhouse will be meaningless for the people who live and work in the North unless the economic growth it generates reaches their pockets.”


The below map illustrates the distribution of the richest and poorest areas in the UK in terms of gross disposable household income per capita, grouped into equally-sized quintiles. It also lists the top-five richest and bottom-five poorest areas in the UK of the 173 shown, as well as the lowest-ranking areas in the North – many of which, as the map illustrates, fall near the bottom of the list.

Map: gross disposable household income in UK areas


Notes to Editors

  1. IPPR North’s State of the North report in October will set out how the North’s economy is faring. The research is a comprehensive, evidenced-based analysis of the challenges and opportunities for the Northern economy.
  2. IPPR North analysed the Office for National Statistics Regional Gross Disposable Household Income (GDHI), 1997 to 2013 figures, available here.
  3. The ONS defines GDHI (Gross Disposable Household Income) as follows: Gross Disposable Household Income is the amount of money that individuals (that is, the household sector) have available for spending or saving. This is money left after expenditure associated with income, for example taxes and social contributions. It is calculated gross of any deductions for capital consumption.
  4. All figures quoted in this release are at current (i.e. nominal) prices. GDHI per person is the estimated values for each person, not each household.
  5. There are three Northern regions – the North West, Yorkshire and Humber and the North East. There are 173 local areas ranked by the ONS in the data.