Three years after the Conservatives’ “Levelling Up” agenda was quietly shelved by the incoming Labour government, replaced by a new framework of “Regional Growth Missions,” the fundamental question that animated the original policy remains stubbornly unresolved: is the UK’s extreme regional economic concentration — with London and the South-East accounting for a disproportionate share of economic output and productivity — changing in any meaningful direction?
The Scale of the Problem
The UK’s regional economic divergence is, by international standards, extreme. London’s GDP per capita is approximately 75% above the UK average; the North-East of England’s is approximately 25% below. This gap is larger than the equivalent divergence in France, Germany, the United States or any other comparable large economy. It has persisted, with only marginal variation, through multiple governments and multiple cycles of regional development spending.
The consequences are not merely economic. Regions with persistently lower productivity and income levels show higher rates of poor health outcomes, lower educational attainment, reduced life expectancy and — increasingly — higher rates of political disaffection. The rise of Reform UK, which draws disproportionate support from post-industrial communities in the Midlands, the North and coastal England, is in significant part a political expression of the frustration generated by decades of regional economic disappointment.
What the Latest Data Shows
The Office for National Statistics’ Regional Economic Activity data shows some encouraging signs in specific places alongside the broader pattern of persistent divergence. Greater Manchester — the beneficiary of sustained devolution and strong mayoral leadership — has continued to outperform the national average, with productivity growth running at 1.6% annually against the UK average of 0.8%. The city-region’s technology sector now employs over 80,000 people, up from 55,000 five years ago.
The picture is less positive in parts of Stoke-on-Trent, Doncaster, Sunderland and the former coalfield communities of South Yorkshire and County Durham, which continue to show productivity and employment figures well below national averages. The closure of the last deep coal mines, the long decline of steel manufacturing and the hollowing out of retail high streets have left structural economic wounds that are proving stubbornly resistant to conventional regeneration approaches.
The Policy Debate
The Starmer government’s approach attempts to combine infrastructure investment through the National Wealth Fund with enhanced skills programmes and a new emphasis on industrial strategy identifying specific sectors — clean energy, advanced manufacturing, life sciences and the creative industries — where regional clusters outside London can build genuine competitive advantage. Whether this approach can deliver the step-change in regional convergence that has eluded every previous government remains to be seen.
— Thomas Hargreaves, London Capital Post
