The North-South divide in the UK’s jobs market

With the divisions between different parts of the UK dominating the news agenda this week, now is as good a time as any to take a deeper look at the extent to which regional divisions also exist in our jobs market.

Today we learned that the UK employment rate is at a record high (again). This is great news – but to what extent does this positive story resonate throughout the country?

As the chart below shows, while some regions are surging ahead other regions are falling behind. The South East and South West have the highest employment rates of any parts of the country, and have extended their advantage over the past year.

In contrast, Scotland, the North East and the North West are all suffering with lower than average employment rates that have either grown slowly or fallen over the past year. It seems that the further North you travel, the less true the talk of a booming jobs market will feel.

Of course, most – though not all – UK regions and nations have recorded positive employment growth in the last year. But it’s still concerning that some of the areas with the most ground to catch up, such as Scotland and the North, are struggling.

The performance of each part of the UK will reflect a wide range of factors. Some of which policy makers have influence over, for example the health of each region’s economy, and some of which are more fixed, for example the mix of people that live in each region. It would be unrealistic to expect every part of the UK to have the same employment rate as the average, but we could – and should – have a more balanced picture of jobs growth than the one that today’s labour market figures report.

The big question these divisions raise is: what sort of outcome do we want for employment across the country? Would perfect equality be a good thing? Or should we keep piling on the jobs in the South of England? Some have argued that the areas with the highest productivity, and greatest potential for future growth (namely London and the South), are the areas that we want to see most of our jobs growth. The effects of a booming London will spill over to the rest of the country.

But it’s clear that this isn’t what’s been happening in the UK. Gaps in employment rates across the country have persisted for a long time. And we know that the only way for the UK to achieve full employment is for us to make progress towards closing the employment gaps between the best and worst performing regions of the country.

Our lopsided economic, and employment, picture needs correcting. Encouragingly, it looks like this is a view that is held by leading government Ministers; Greg Clarke has stressed the importance of place in his plans for a new Industrial Strategy and Theresa May has spoken of wanting to iron out the inequalities across the UK too.

But, for now, we are yet to see much action. Expect the North-South employment divide to come a lot more as we approach the upcoming Metro Mayor Elections in May and the government’s industrial strategy plans to take shape in the Autumn.

Today we have launched a page on our website, which we will update on a monthly basis, setting out a detailed picture of how the employment picture varies across the nations and regions of the UK.