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The Shocking Divides Between London and the Rest of Britain
Sam Bright details some of the key findings from his new book, on the extreme imbalances between London and other parts of the country
Modern British politics can only be properly understood in the context of regional inequality. Both Brexit and the 2019 General Election, we have come to understand, were outbursts of rage from older, poorer, less well educated voters in rural and former industrial areas who are sick of the status quo – of their areas deteriorating while other places prosper.
However, while much of this conversation focuses on the ‘Red Wall’ and the fabled north-south divide, a formative regional inequality in Britain has been neglected: between London and everywhere else.
Indeed, our all-consuming capital is a vast metropolis with little in common with other urban areas. Its education system, economic output, housing market and demographic make-up are all radically different to the rest of the country – creating acute imbalances that are suffered by people both inside and outside the capital.
I have been researching this subject for the past few years, culminating in my book, published today, Fortress London: Why We Need to Save the Country From its Capital. Below is a snapshot of what I discovered.
Economy
Productivity in London, measured in terms of Gross Value Added, is 30% above the England-wide average, and 40% above the lowest-performing regions.
Gross disposable household income per head in London was £30,256 in 2018 – nearly double the total in Yorkshire and the Humber (£17,959). Ergo, for every minute on the roughly two-hour train journey from the capital to God’s own country, household income per head falls by £102.
In 2017, disposable income per head in east Germany was €19,909 per year; in west Germany it was €23,283 – a smaller economic gap than between London and the rest of the UK.
The UK’s most productive region, west inner London, has an income per hour that is 70% higher than Northumberland’s, while London and the wider south-east are the only regions that are more productive than the UK average.
As of 2018, London accounted for 30% of all private sector employment in the UK, despite its population representing roughly 15% of the national total.
From 2009/10 to 2019/20, London transport spending per head on average has been £864 – compared to £379 in the north-west of England and £413 in England overall.
Education
Kids on free school meals in London are twice as likely to go to university as their socioeconomic peers in the north.
Overall, 49% of students in London go to university, compared with roughly 35% in every other English region.
In the most deprived areas of London, 35% of secondary schools are classified as outstanding and close to 90% are either good or outstanding. In the most deprived areas of the north, less than 10% are rated as outstanding and less than 50% are either good or outstanding.
There are eight parliamentary constituencies in England where there are no schools or sixth form colleges – either independent or state-run – offering A-Levels. Six of these constituencies are in the north.
Property Market
In 2020, the average house price in London stood at £497,000 – almost double the England-wide average of £262,000. In Yorkshire, the figure was £175,000, in the north-west £177,000, and £275,000 in the south-west.
The average house price in Kensington and Chelsea in March 2020 was £1.4 million, in Islington it was £632,000 and in Southwark it was £489,000. This compares to £200,000 in Manchester, £220,000 in Leeds and just £165,000 in Durham.
If two people each bought a house in 1980 for £50,000 – one in London and one in Yorkshire – the former would have accumulated £400,000 more in property assets by 2020, with the house likely to be worth £770,000 in London and the house in Yorkshire worth £380,000.
If food prices had tracked house price inflation, in London a chicken would now cost £100, says Anna Minton in Big Capital.
Since 2010, average private rental prices in London have grown at five times the rate of average earnings. The typical rent for a one-bed flat in London now exceeds the cost on average for a three-bed place in every other English region.
In London, a home within 500 metres of an outstanding primary school will set you back an average of £685,000 – a premium of £93,000 versus a home in close proximity to a ‘good’ school and £196,000 more, on average, than a home in the catchment of a school that ‘requires improvement’.
Total property equity in London and the south-east amounts to some £1.53 trillion, versus £533 billion in the north.
In 1990, 25% of people aged 16 to 24 owned their own home in London, falling to 7% by 2018; correlating with a fall in the 25-34 age bracket from 57% to 34% over the same period.
From 1996-98 to 2014-15, the capital saw a 41% increase in young people living with their parents.
The percentage of first-time buyers in the capital receiving parental help has fluctuated in recent years between 25% and 40% – consistently 10 percentage points higher than the rest of England.
Almost 25,000 London homes were left unoccupied in 2020 – the highest figure since 2012 – at an estimated total worth of £11 billion. Homelessness and rough sleeping rates rose by 165% in England between 2010 and 2018.
Transparency International has calculated that at least £6.7 billion worth of property in the UK has been bought with suspicious wealth since 2016 – more than 80% purchased in London. Out of the £6.7 billion, £1.5 billion has been bought by Russians accused of corruption or links to the Kremlin, with these individuals favouring the City of Westminster (accounting for £430 million, or 28.3%) and Kensington and Chelsea (£283 million or 18.8%).
Poverty
The number of people living in poverty in London (some 2.5 million) is only slightly smaller than the entire population of Greater Manchester.
Life expectancy is some 16 years lower for men in the most deprived areas of Kensington and Chelsea than in the least deprived areas.
The poorest 50% of Londoners hold just 6.8% of the capital’s wealth, while the top 10% retain 42.5%.
As of 2020, 28% of people in London were living in poverty, after housing costs, compared to 22% in the UK as a whole.
Some 74% of impoverished adults in the capital are in working families, up from 62% a decade ago. In the three years to 2016, 39% of private renters in London and 46% of social renters were in poverty, falling to 12% among owner-occupiers.
From 2014 to 2019, the number of children in the north of England living in a poor household increased by 200,000 – taking the total figure to 800,000. Over the same period, weekly pay increased by only 2.4% in the north versus 3.5% nationally.
Child poverty increased by 16% in the Red Wall from 2014/15 to 2019/20 – double the England-wide average. Child poverty in the north-east increased from 26% to 36.9 per cent in this period, while it fell in the south-east, from 24% to 23.8%, and only marginally increased in the south-west – from 26% to 26.1%.
Sam Bright’s book, ‘Fortress London: Why We Need to Save the Country From its Capital’, is published by HarperCollins