South-east's economy still counting cost of recession: Regional disparities narrow - North-west's relative decline continues - East Anglia has biggest rise in share of GDP

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MOST of Britain's less well-off regions gained ground on the rest of the country during the recession as the South-east bore the brunt of the downturn, official figures showed yesterday. But the long-term relative decline of the North-west continued unabated.

The Central Statistical Office's regional analysis of the national accounts showed that output per head of goods and services in the South- east fell relative to the rest of the country for the third successive year in 1992, reflecting its high burden of mortgage and business debt.

But the South-east still had the highest level of national output per head, at pounds 10,800 in London and pounds 9,700 in the rest of the region. The South-east accounted for more than 35 per cent of national output in 1992, although only about 30 per cent of the population live there.

Regional disparities in Britain had widened during the Eighties boom, which particularly benefited the southern regions of the country. The North-west, like most relatively badly-off regions, saw its output per head fall against the rest of the country, but it has also continued to decline during the recession.

Over the past 10 years, East Anglia saw the biggest rise in its share of national gross domestic product, increasing from 3.3 per cent in 1982 to 3.7 per cent in 1992. Most of the growth in East Anglia's share happened in the early part of the period, taking its output per head above the national average.

These regional changes are even more pronounced within county boundaries. Merseyside's output per head has fallen from 89 per cent of the national average in 1982 to 74 per cent in 1992. This fall in relative output per head puts Merseyside barely ahead of Mid Glamorgan, Cornwall and the Isle of Wight. Other areas whose fortunes have deteriorated significantly between 1982 and 1992 include the Central and Fife area of Scotland, South Yorkshire and Northumberland.

Particular areas within regions have had dramatically differing performances, showing that any notion of the North/South divide is simplistic. The South-east had average output per head 17 per cent above the national average in 1992, but within the region the Isle of Wight and East Sussex had output per head 29 and 12 per cent below the national average respectively.

The differences in output per head do not correspond exactly to the material well-being of residents in each area. The figures compare the value of output in different areas, not the volume of output. Costs and prices are lower in poorer areas, in part because wage levels are lower.

The same value of output in a poor region may correspond to a higher quantity of goods and services because they cost less.