North-South divide closed by recession

The North-South divide in the United Kingdom is narrowing and is predicted to close further by 2000, according to a report yesterday from the market analysts Mintel. But by then, London will still have an income per head 20 per cent above the national average, with the South-east still enjoying a 10 per cent advantage.

Throughout the 1980s as the recession in the early part of the decade hit manufacturing and the North, London's wealth advantage over the rest of the country grew. But since 1990, London and the South-east have taken the brunt of an economic downturn which hit the financial and service sector hardest, while manufacturing has benefited from export growth. As a result, while they remain the most prosperous parts of the country, the two regions saw growth rates of only 14.7 and 16.4 per cent in their share of gross domestic product per capita while every other part of the United Kingdom did better.

Northern Ireland saw 25 per cent growth, Scotland 22.8 per cent, Yorkshire and the North-east 20.1 per cent and the North-west 19 per cent.

Since 1986, Scotland has done particularly well, its unemployment levels now close to the national average as its role as a finance and electronics centre has expanded on top of its oil and gas revenues.

While Scotland has much lower rates of home ownership, it is the only region to have seen house prices rise rather than fall during the recession - up 21 per cent against a 24 per cent fall in London.

Angela Hughes, Mintel's consumer research manager, said she expected the North-South divide to continue to close economically, "although I don't believe it will ever close altogether". Mintel's projections are that up to 2000, consumer expenditure will grow by 11.5 per cent from its 1994 figure on average, but London and the South-east will see slower growth of 9.2 and 10.5 per cent.

Despite the closing of the gap, however, marked regional disparities in lifestyle remain. The image of the "canny Scot" holds up - Scots saving 15 per cent of their disposable income, against a United Kingdom average of 10 per cent. London and the South-east save far less - 6 to 7 per cent - and are much more dependent on credit and credit cards.

In the North-west, Coronation Street lives on with the region spending more in pubs which are rated highly as key centres of social activity.

All regions rated a safe neighbourhood as their primary concern, but financial worries, long working hours and lack of free time topped the factors listed by those living in London and the South-east as the issues limiting their enjoyment of life.

The North-west emerges as the home of bargain hunters and the biggest users of market stalls, but it is not the region that enjoys shopping most. That accolade goes to the South-west and Wales, followed by Scotland, with the Scots rating "lots of money" as the a key factor needed for a good quality of life.

9Regional Lifestyles, Mintel, 18-19 Long Acre, London, EC1 9HE; pounds 895.