Average annual wages in London are nearly £20,000 higher than in lowest-paid parts of the UK, analysis by the Centre for Cities thinktank has shown.
Its Cities Outlook 2025 report has shown the stark pay divides across the UK. Average annual salaries in the South East are £12,800 higher – and in London nearly £20,000 higher – than in places with the lowest pay such as Burnley, Huddersfield and Middlesbrough.
This means that by August the average worker in London will have earned what a worker in Burnley will take home in a year.
The researchers said a lack of “cutting-edge” jobs outside London and the South East means just seven places in the rest of the UK have salaries above the national average.
Centre for Cities says 2025 needs to be a year of action by the government to boost economic growth and close regional divides.
Andrew Carter, chief executive of Centre for Cities, said: “The government is right to identify boosting economic growth for every part of the country as a top priority. It is the only sustainable route to higher wages. But the stark nature of Cities Outlook’s findings shows an incremental approach is not going to be enough.
“Boldness, urgency and scale are crucial. 2025 needs to be year for delivery, particularly on the Government’s Industrial Strategy, framework for English devolution and its reforms to planning.”
The pay divide primarily results from some cities having far more “cutting edge” private sector jobs and businesses than others. Places with the highest pay such as London and Cambridge have more than twice as many cutting-edge firms and three times as many cutting-edge jobs – in sectors like biotech and AI – as low-pay towns and cities such as Burnley, Huddersfield and Middlesbrough.
Out of the 63 largest towns and cities analysed, nearly all those with above-average salaries for the UK are in the South East, including Reading and Milton Keynes. Only seven places in the rest of the country have salaries above the UK average – Leeds, Warrington, Derby, Swindon, Bristol, Aberdeen and Edinburgh.
The report’s authors said that cities and towns where workplace wages are low have to address the barriers to growth in cutting-edge parts of their economy.
This will require evidence-based assessments on the weaknesses in their local economies, prioritising high-skill work over high-street activity and investing in fundamentals – such as skills, transport and workspaces.
Cities Outlook 2025 also emphasises the importance of implementing the proposed changes to the national planning system to make housing delivery easier and quicker.
Regional inequality
‘Skills chasm’ between UK regions is self-reinforcing
Lowering housing costs is a challenge for cities and large towns with high wages, including London and most places in the South East. It found half of the 10 places with the highest average wages also rank in the 10 least affordable housing markets.
Carter continued: “Bold changes to planning rules can deliver more housing in the most expensive places and in our big cities, where it’s needed most.
“The Industrial Strategy must prioritise growing the cutting edge of the economy, and avoid calls to do something for all sectors and industries. And English devolution needs to be fast-tracked so more places, particularly the big cities, have the powers and resources to deliver the pay increases that many parts of the country badly need.
“This government has promised more money in people’s pockets. If people across the country are going to earn more by the end of the parliamentary term, then 2025 is year we need to see action and progress on the government’s growth ambition.”
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