06 August 2007

North-South Divide

Gross Value Added (GVA) per head by region (%)
Chart showing the output (or Gross Value Added) per head by region (%) in 1997 and 2005Compared to the UK average, economic output per head has reportedly risen in London (and very marginally in the South East and South West) under Labour. Consequently, it has therefore fallen in other areas, most noticeably in the West Midlands and Yorkshire & the Humber (and to a lesser degree in the North East and North West of England).

Given the disproportionate investment that the Government has channelled from the south to the north, it is easy to see why the Institute for Public Policy Research says this represents a failure for the Government. Accepting Labour's current premise that we need to "reduce the persistent gap in growth rates between the regions," the think tank is calling for "a new target to reduce the absolute gap in levels of GVA between regions." However, while I understand why the failure to enforce a strict equality between and within all regions would constitute a disappointment in a Communist state, can anyone explain why differences across the country should be interpreted as a bad thing in a market economy?


The Blunderer said...

Isn't the answer to your question obvious? Large swathes of the poorer performing areas are Labour heartlands, it is therefore imperative that the better performance of non-Labour areas be driven down so that there is no perceived inequality. A target wil achieve this.