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Over half of people across the country, including 63% of people in the north, have seen no evidence of levelling up’ in their community since the 2019 general election

Govt’s ‘levelling up’ agenda in doubt as incomes in London and the south-east rise six times faster than in red wall regions in the last two years according to new NEF analysis


Over half of people (58%) across the country, including 63% of people in the north, have seen no evidence of levelling’ up in their community since the 2019 general election, according to new polling carried out by Opinium for the New Economics Foundation (NEF). In conservative gain seats, 64% of people have seen no evidence of levelling up’. This comes after NEF analysis this week showed incomes in London and the south-east have risen six times faster than in red wall regions like the north-east and north-west.

The polling also shows that only 20% of people feel better off compared to two years ago, with only 4% of people saying that they feel considerably better off since the election. This varies slightly across regions, with 18% of people in the north saying they feel better off, compared with 25% of people in London.

NEF’s recent analysis shows why many don’t feel better off, with the incomes of the poorest 50% of families squeezed by £110 while the top 5% of families have gotten richer by £3,300 a year. As a result, there are 300,000 more families in poverty in December 2021 compared with 2019.

The analysis also highlighted the regional gap in incomes, which has widened over the last two years, with places supposed to benefit from the government’s levelling up’ agenda worst hit:

  • On average, incomes in the north-east have risen by less than £20 (or 0.1%) a year
  • In the north-west and Merseyside by £80 (0.2%)
  • In Yorkshire and the Humber £90 (0.3%)
  • Northern Ireland also £90 (0.3%)
  • In London, incomes have increased by more than £600 a year (1.3%)
  • In the south-east £550 (1.1%)

The analysis breaks down this growing inequality further within regions, by working and non-working families, and family type:

  • Families in the top 50% of disposable incomes have seen their living standards improve across the board, though fastest in London and the south-east. Meanwhile families in the poorest 50% have seen incomes fall everywhere except for London and eastern England.
  • Losses are concentrated to those outside of work but even within workless families there’s large variation across regions, with average losses of more than £200 per year in Yorkshire and the Humber and the north-west and Merseyside, compared with small gains in the south-east and south-west.
  • Single parents were the worst affected families across all regions, with single parent families in Yorkshire and Humber and the north-west and Merseyside seeing their incomes fall by around 15 times as much as in London.

NEF argues this sharp increase in inequality has been driven by the government’s pandemic response, which has more recently left poorer families exposed to global price rises and inflation. The design of emergency Covid-19 measures resulted in less support, on average, for the poorest.

The UK also had one of the weakest social security systems among advanced economies going into the pandemic, and the universal credit uplift was much less generous than top-ups seen in other in other countries. The polling showed that over half of people (56%) would support a Living Income so that the UK’s social security system provided everyone with a sufficient minimum income to meet everyday living costs, whether in or out of work.

Alfie Stirling, director of research and chief economist at NEF, said:

These results show that the government’s handling of the pandemic has led to the richest families and regions getting richer, while the poorest families are even poorer. With prices expected to continue increasing, the threat of a rise in interest rates and ongoing effects of Brexit, things could get a lot tougher for families that have already suffered most.

In the long run, any agenda to tackle these issues needs to grasp the fundamental drivers of regional inequalities for places, people, and industry. But in the short term, more should be done to help families through the social security system. NEF’s proposal for a Living Income would ensure an income floor that reflects the true cost of living for families.”

Dominic Caddick, assistant researcher at NEF, said:

Far from levelling up’, on this prime minister’s watch the families and places that were already poorest have fallen even further behind the rest of the country. This would be an indictment on any government, let alone one where the promise to level up” sits at the heart of its political and policy agenda.

This analysis exposes the vulnerability of the UK’s current safety net in responding to real world change. We need a bold reimagining of income support: NEF’s argument for a Living Income would help people deal with the challenges and opportunities presented by the fast-changing economy we’re all living in.”


Contact

Becky Malone, becky.​malone@​neweconomics.​org. 07925950654

Notes to editors

The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.

The full analysis is available at https://​newe​co​nom​ics​.org/​2​0​2​1​/​1​2​/​t​w​o​-​y​e​a​r​s​-​o​n​-​b​r​i​t​a​i​n​-​h​a​s​-​b​e​e​n​-​t​o​r​n​-​a​p​a​r​t​-​n​o​t​-​l​e​v​e​l​l​ed-up

Opinium carried out a nationally representative survey of 2,042 UK Adults between 9th and 10th December 2021

Full polling available at https://​www​.opini​um​.com/​w​p​-​c​o​n​t​e​n​t​/​u​p​l​o​a​d​s​/​2​0​2​1​/​1​2​/​N​E​O​N​-​L​e​v​e​l​l​i​n​g​-​up-21 – 12-15.xlsx

The poll asked respondents:

  • At the last general election in 2019, the government pledged to level up’ the country. This means reducing inequality between the poorest and richest parts of the country through investment and improving outcomes for communities, particularly in the north and midlands of England. Which of the following best describes your experience of levelling up in your community?
  • Thinking of you and your family’s ability to pay for things like cost of bills, rent and other day to day outgoings… Which statement best describes your current financial situation, compared to two years ago?
  • The Living Income is a proposal to change to the UK’s social security system to provide everyone with a sufficient minimum income to meet everyday living costs, whether they are in or out of work, using money raised from the tax system. Would you support or oppose the introduction of a living income?

Using the IPPR tax and benefit microsimulation model we have forecast household incomes for December 2021, based on data from the Department for Work and Pensions (DWP) Family Resources Survey and the latest forecasts for things like inflation, earnings, and interest rates from the Bank of England (BoE) and the Office for Budget Responsibility (OBR). We have also applied the latest policy changes made at the Autumn Budget where these have already taken effect. We then compare this forecast for December 2021 to household incomes in the month Johnson took power – December 2019 – and compare the changes experienced by families in real terms over the period.

Poverty is defined in terms of families with equivalised income below 60% of the UK median before housing costs.

If you back a recovery plan based around great public services, protecting the planet and reducing inequality, please support NEF to build back better.


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