The economic gulf between London and the rest of the UK widened during the credit crunch, official data reveals.
The economic gulf between London and the rest of the UK widened during the credit crunch, official data reveals.
Some 23.5 per cent of the UK’s “gross value added” (GVA) was generated by the capital in 2008, up from 22.5 per cent the previous year, according to provisional data from the Office of National Statistics (ONS).
That is more than seven times greater than the GVA of the entire North East of England, which was just 3.1 per cent of the total.
The only region to approach London in economic significance is the South East, which was responsible for 15.4 per cent of the UK’s GVA in the year under review, a slight increase on 2007.
However, Allan Little, an economic adviser at regional development agency One North East, says the GVA figures cover ‘only two thirds’ of the economy, omitting much of the public, financial and agricultural sectors.
Adds Little, ‘December’s full GVA results will provide a better indication of how the region was impacted by the recession and the gap between the North East and South East. But indications show that in terms of GVA per head [the North East] was broadly matching the UK rate of increase and has been since 2000.’
According to the ONS data just released, Scotland accounted for 10 per cent of UK GVA in 2008 (up from 8.6 per cent in 2007) with Wales on 2.8 per cent and Northern Ireland on 2 per cent.
GVA is a measure of the amount that businesses, industries or sectors contribute to the economy, based on income generated less the cost of labour and raw materials.
The data’s release follows an announcement of the government’s intention to scrap regional development agencies, which attempt to promote economic development across England.
