The average London worker could quit their job in August and still be paid what an average worker in Burnley would make in a year, according to a report highlighting Britain’s stark regional pay divide.
Calling on the government to close regional pay divisions and increase economic growth, the Centre for Cities said the average annual wage for an employee in London was almost £20,000 higher than in the lowest-paid places in the UK.
With an average wage 24% higher than the national average, workers in London typically are paid 68% more in a year than their peers in Burnley. The average wage in the east Lancashire town, of £29,508, would take a worker on the capital’s average, of £49,455, just eight months to earn.
Publishing its annual Cities Outlook report, the thinktank said the pay divide primarily resulted from some cities having more “cutting edge” private sector jobs and businesses than others. Places with the highest pay, including London and Cambridge, have more than twice as many cutting-edge companies and three times as many jobs in leading sectors – such as biotech and AI – as the country’s lowest-paying towns, such as Burnley, Huddersfield and Middlesbrough.
Keir Starmer’s government has pledged to narrow the gaps between Britain’s wealthiest and poorest places by boosting economic growth and measures to devolve power to local communities.
Labour last month announced plans to give mayors sweeping powers to unblock planning delays for major building projects in England, under proposals championed by the deputy prime minister, Angela Rayner. Ministers are also developing an industrial strategy to direct economic activity across the country.
The UK is one of the most regionally divided places in Europe, with a gulf in productivity between London and the rest of the country and yawning income gaps between the richest and poorest towns and cities.
While wages in London are significantly higher than the rest of the UK, higher housing costs narrow the gap in after-housing cost incomes. The report found that half of the 10 places with the highest average wages also played host to the least affordable housing.
The Centre for Cities said urban centres needed to focus on the cutting-edge parts of their local economy and address skills, transport and workspace requirements. It also said rapid action to reform the national planning system was required to make housing delivery easier and quicker.
Andrew Carter, the chief executive of the Centre for Cities, said: “Bold changes to planning rules can deliver more housing in the most expensive places and in our big cities, where it’s needed most.
“The industrial strategy must prioritise growing the cutting edge of the economy and avoid calls to do something for all sectors and industries. And English devolution needs to be fast-tracked so more places, particularly the big cities, have the powers and resources to deliver the pay increases that many parts of the country badly need.
“This government has promised more money in people’s pockets. If people across the country are going to earn more by the end of the parliamentary term, then 2025 is the year we need to see action and progress on the government’s growth ambition.”
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