06 September 2019

Tackling Spatial Inequalities – part two, by Martyn Jenkins

Martyn Jenkins

In the first of my blogs looking at the spatial inequalities within the UK, I outlined and illustrated the nature of the problem, its historical context, and the impact this is having on regional economic performance.

In this second instalment I illustrate how the divergence in economic growth and productivity is manifesting itself in significant wealth inequalities, which have both social and health implications for society.

Wealth Impacts

The implications of a spatially unbalanced economy, in which we are overly reliant on a few regions in particular, are great, and felt by all in society. For instance, all taxpayers regardless of where they reside pay directly through a growing benefits bill, and indirectly through the under-performance of our economy. However, for those households and individuals who experience such inequalities directly, the impacts are great, and have an overarching bearing on their lives.

Primarily the weak economic performance of a region translates itself into lower wealth for its population. A key metric of this is the disposable income of households. As the heat map below illustrates, there is a significant gap between the wealth of households between the southern and northern regions in England.

Graph 1 – Heat map showing regional divergence in household disposable income

A similar trend is seen when considering numerous other economic indicators, including labour market data (the unemployment and employment rate) and the regional gross value added (GVA) generated.

Pertinently, this underlying imbalance can result in an inequality feedback loop, a hypothesis widely held by academics, in which rising income inequality means those at the two ends of the spectrum live at greater social distance from one another and come to work in increasingly polarised labour markets, thus sustaining the gap.

Such wealth gaps, which underpin the deprivation and relative poverty experienced in the UK, also have knock on impacts for the health of society.

Health Impacts

There is a plethora of evidence which illustrate the link between the wealth of a population and its physical and mental health (i.e. individual households in less prosperous regions have poorer health). This correlation can be broadly split into two main themes:

  • Behavioural: For various reasons, people on low incomes are more likely to adopt unhealthy behaviours – smoking and drinking for example – while those on higher incomes are more able to afford healthier lifestyles. This is reflected in data across the UK which illustrate that households in less affluent regions (the “north”) have lower life expectancies (graph 4), and a higher incidence of a range of conditions including obesity and cardiovascular diseases.

  • Psycho-social: Managing on a low income is stressful. Comparing oneself to others and feeling at the bottom of the social ladder can be distressing, often leading to a feeling of hopelessness and mental health issues. This is a similar effect seen in individuals who are unemployed for a prolonged period of time.

The result is a country which is not only economically imbalanced, but one in which there are significant regional disparities between the health and quality of life.

Graph 2 – Divergence in Life expectancies across regions

Social Impacts

Worryingly, the divergence in economic performance and health arising from an unbalanced economy can result in wider social implications, and specifically an increasingly polarised society between the “haves and have nots”.

This perhaps manifested itself most clearly in the EU Referendum result, when a large proportion of votes to leave the EU is understood to be a visceral reaction from those who felt increasingly powerless as a result of widening economic inequalities, and a failure of successive UK government administrations to redistribute income and wealth more equitably. Indeed, London was the only English region to record a majority Remain vote. Such a divergence amongst communities is a growing concern.

Summing up

It is clear therefore – even from my brief overview - that a spatially unbalanced economy has severe negative implications on not just the economy, but the health of the population and social cohesion.

So, what can be done?

Check out the third and final part of my blog series in which I will be looking at some possible recommendations which will help to alleviate the spatial imbalances within the UK economy.