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Wednesday, Apr 02, 2025

Regional Pay Disparities Highlighted in UK Think Tank Report

Regional Pay Disparities Highlighted in UK Think Tank Report

Centre for Cities Report Exposes Significant Wage Gap Between London and Other UK Towns
A report by the Centre for Cities has highlighted a stark pay divide between workers in London and other parts of the United Kingdom, with average salaries in the capital reported to be 68% higher than those in Burnley.

The findings emphasize a regional discrepancy wherein London workers earn significantly more, often due to the concentration of cutting-edge private sector jobs in the capital.

According to the Centre for Cities, the average annual wage for a London worker is £49,455, compared to £29,508 in Burnley.

The report indicates that this disparity allows a worker in London to earn an annual salary equivalent to that of a Burnley worker in just eight months.

This divide is attributed to the presence of industries such as biotechnology and artificial intelligence, which are more prevalent in cities like London and Cambridge, where there are more than twice as many cutting-edge companies as in lower-paying towns.

The Centre for Cities' annual Cities Outlook report reveals that regional pay disparities are a consequence of economic concentration in certain urban areas.

These findings come as Keir Starmer's government has pledged to address such disparities through economic growth strategies and measures to devolve power to local communities.

Recent announcements by the Labour party include granting mayors increased powers to expedite planning processes for major infrastructure projects in England, and developing an industrial strategy to balance economic activity across the nation.

Despite higher wages, London also faces significantly greater housing costs, which diminish the income gap when after-housing-cost incomes are considered.

The report calls for urban centers to enhance local economic sectors by addressing skills, transport, and workspace needs and suggests quick reforms to the national planning system to facilitate housing development.

Andrew Carter, chief executive of the Centre for Cities, advocates for changes in planning rules to increase housing availability in high-demand areas and emphasizes prioritizing growth in cutting-edge sectors within the industrial strategy.

The UK remains one of the most regionally divided economies in Europe, with a notable gap in productivity and income between its richest and poorest areas.

The Centre for Cities emphasizes the need for swift action to fulfill government promises of increased earnings by the end of the parliamentary term in 2025.
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