Inequality grows in Blair's Britain, report shows

Average income in Britain has risen under the Labour Government - but the distribution of wealth remains a story of increasing inequalities, particularly evident on a regional basis, according to the Wealth of the Nation report.

Average income in Britain has risen under the Labour Government - but the distribution of wealth remains a story of increasing inequalities, particularly evident on a regional basis, according to the Wealth of the Nation report.

The triennial study into household income, published today, is the first since Tony Blair came to power. Nationally, it shows an average rise in income of 9.6 per cent to £21,365. However, some areas, mainly the South and parts of London, have seen substantial rises in average earnings while others have seen very low growth rates. One region, the Outer Hebrides, has recording a fall in income. The figures do not take account of inflation.

The report also shows that the North-South divide is greater than ever, with Surrey residents enjoying an average household income that is 71 per cent higher than that of Tyne & Wear. But there are some notable exceptions: the northern town of Huddersfield shows one of the highest income growth rates in the country, while the very middle-England town of Norwich registers one of the lowest.

The report, based on four million households nationwide, was first conducted in summer 1996. This second study, from data collected in 1999, is the first to show how the Government's economic performance has directly affected people in Britain.

In 1996, before he came into office, Tony Blair pledged to bring about "greater equality". "If the next Labour government has not raised the living standards of the poorest by the end of its time in office it will have failed," he said. Although the Government's drive to ameliorate "social exclusion" is intended to address disadvantage in a wider sense than just income - including health, schooling and unemployment - the figures indicate the significant disparities of wealth across the country.

Disparity in household income is part of inequality, said Paul Winters, head of market analysis at Caci, the information services company which conducted the study. "Household income is a measure for the Government to take into consideration in assessing their own economic performance," he said. "The figures ... can be useful when policy makers or companies are looking to allocate scarce resources."

At a regional level, the highest average household income is in Greater London, £25,609, followed by the South-east, £24,990. These are the only regions in which average household income is ahead of the national average. Moreover, income in these regions is 40 per cent higher than the north of England. Tyne & Wear, Cleveland, Cumbria, Durham and Northhumberland have the lowest average household income of £18,205, followed closely by Wales, £18,676, and Yorkshire and Humberside, £19,222.

A number of towns and cities have benefited over the last three years with an income growth of over 12 per cent. The majority of these in England are in London or the South-east. Huddersfield is the exception, with a growth rate of 13 per cent. Its growth has been put down to infrastructure investment and the influx of regional grants that have created jobs.

The nation's five poorest towns and cities are Sunderland, Truro, Sheffield, Plymouth and Swansea, all with an average income of £18,000 or less.

The wealthiest people in the country are all concentrated in London, with those in central London, Blackfriars, Barbican and Belgravia all with household incomes of over £50,000.

Meanwhile, the pockets of poverty are less concentrated. Well over 80 per cent of households in Bootle, Leicester, Birkenhead, Central Belfast, Liverpool's Edge Hill and central Middlesbrough earn less than £13,000 a year.

Huddersfield

Early this century, when Huddersfieldÿs textile mills thrived, it boasted more Rolls-Royces per head of population than any other town in Britain, writes Ian Herbert. The political theorist Frederick Engels described it as Òthe most handsome of the Yorkshire textile townsÓ, with its majestic railway station and wonderful architecture.

But when the mills started shutting, Huddersfieldÿs rich past did not dissuade it from accepting state hand-outs. In the past 10 years it has become a formidable accumulator of grants from Europeÿs single regeneration budget (SRB) and even the Òcity challengeÓ pot, despite being a town.

This accounts for its job-creation record, which has helped significantly to increase household incomes. Grants have subsidised the investments of chemical and manufacturing firms and have stemmed the decline in textiles. Consequently, manufacturing still accounts for 29.1 per cent of jobs in the local Kirklees borough against 18.4 per cent across the UK.

A council partnership with the townÿs football and rugby league clubs also fashioned the finest symbol of Huddersfieldÿs re-established virility ÿ the 24,000-seat McAlpine sports stadium and concert venue.

Despite its new-found vibrancy, the council was surprised to learn that the town has risen so quickly up the household income ladder. Most recent figures show the average weekly wage to be £314.60, against a UK mean of £351.17. The Huddersfield Examiner has just reported that another £35m of SRB money has been allocated to help the suburbs of Birkby and Crosby Moor, where there is more than 9 per cent unemployment. Proof, if it were needed, that the place is not basking in affluence.

Norwich

The Norman cathedral and castle and the medieval Guildhall which lie within the city walls are perhaps fitting symbols for Norwich: glorious, but historic, writes Andrew Mullins.

The genteelly prosperous reputation of the East Anglian city, the second oldest in Britain, leaves visitors surprised to discover that its 128,000 inhabitants have a mean household income more than £2,500 lower than the national average, with the third slowest rate of wage increase in the country.

But to locals, including the Norwich North MP, Dr Ian Gibson, that is not a revelation. ÒIt comes as no surprise to me that there is poverty in parts of Norwich,Ó he said. ÒIt is not a city that has ever flaunted itself and itÿs ignored because itÿs at the end of a rail line. It has never had the pizzazz of Liverpool or Manchester so it never got publicity for how it has been run down.Ó

Norwich was once the booming capital of a shoe making industry that has almost disappeared because shoes can be made more cheaply in other parts of the world. In the Eighties and early part of this decade it suffered the loss of other big local employers such as Rowntree Mackintosh.

Various reasons are put forward to account for the cityÿs poverty, but some believe it suffers because of its poor transport links. Clive Wilkins-Jones, a local history librarian, said: ÒThe problem is weÿre a bit cut off. Though there is a section of opinion that sees this is a good thing."