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London and the South East will account for two-fifths (40%) of the UK economy by 2022 if current trends continue, according to TUC analysis published today (Friday) ahead of the release of official GDP figures for the first quarter of 2017.

28 April 2017

London and the South East will account for two-fifths (40%) of the UK economy by 2022 if current trends continue, according to TUC analysis published today (Friday) ahead of the release of official GDP figures for the first quarter of 2017.

The analysis projects how the regions and nations of the UK will grow over the course of the next parliament if existing trends continue. It is part of a series of TUC election warnings, which show what the British economy will look like in 2022 if current trends continue unchecked.

It finds that by 2022, London and the South East will account for 40% of the UK economy, a rise of 2.5 percentage points from 2015 (the latest available year). In 1997 London and the South East accounted for a third of the UK economy.

If current patterns continue, the most significant falls in the share of the economy over the next parliament will be in Yorkshire (dropping 0.5 percentage points to just 6.1%), the North West (down 0.4 ppts to 9%) and Scotland (falling 0.4 ppts to 7.2%). 

The TUC says that a comprehensive industrial strategy is essential for rebalancing the economy, and for bringing strong growth and decent jobs to all parts of the UK. It is calling on the parties to make manifesto commitments to:

  • Invest more in infrastructure, to enable the UK to compete with other advanced economies. Digital and communications, transport, water and flood defences, and housebuilding all need additional support.
  • Use public procurement policy to improve jobs and pay, by sourcing goods and services from companies that give workers decent pay and conditions, and by ensuring that companies wishing to invest in skills and apprenticeships are not overlooked in favour of those seeking to compete on low cost.
  • Grow the UK’s green economy, by setting a robust target of 50 per cent of the UK’s energy coming from renewables by 2030 and making sure new green jobs are delivered to areas that need them most.
  • Target low paid sectors of the economy, to find ways to improve productivity and raise skill requirements so workers have better pay and conditions.
  • Give workers a stronger voice, by putting workers on company boards and giving worker representatives seats on industrial sector councils and bodies like the National Institute for Apprenticeships.

TUC General Secretary Frances O’Grady said: “This analysis shows that, with London and the South East dominating economic growth, too many people are missing out on the chance of a decent job just because of where they live.

“That’s not sustainable, and it’s why more than ever we need an industrial strategy that delivers good jobs where they’re needed most.

“Britain needs great jobs – and all the political parties must explain in their manifestos how they will deliver growth in every corner of the country, not just the capital.”

ENDS

Notes to Editors:
The analysis projects forward the share of regional/national GDP on the basis of trends between 2010 and 2015. These figures are not a forecast, but simply an assessment of outcomes if existing trends continue.

The chart below sets out this data, showing the share of GDP in each region in 1997, 2015 and the projection for 2022. The total share is between 99 and 100% in each year; any residual follows because ONS regional figures do not add up to the UK GVA total (there is an ‘ex-regio’ factor) and also because the forecasts are unconstrained.

Region

Share of UK GDP by year (%)

Change to share (ppts)

 

Projection (P)

2015-22

Outturn (O)

1997-2015

P & O

1997-2022

 

1997

2015

2022

 

North East

3.1

3.0

2.9

-0.1

-0.2

-0.3

 

North West

9.7

9.4

9.0

-0.4

-0.3

-0.7

 

Yorks & The Humber

7.1

6.6

6.1

-0.5

-0.5

-1.0

 

East Midlands

6.2

5.9

6.0

0.1

-0.4

-0.3

 

West Midlands

8.0

7.2

7.3

0.1

-0.8

-0.7

 

East of England

8.9

8.7

8.8

0.1

-0.2

-0.1

 

London

18.7

22.7

24.8

2.0

4.0

6.0

 

South East

14.8

15.0

15.4

0.4

0.1

0.5

 

     London & South East

33.6

37.7

40.1

2.5

4.1

6.6

 

South West

7.7

7.6

7.4

-0.1

-0.1

-0.3

 

Wales

3.6

3.3

3.2

-0.1

-0.3

-0.4

 

Scotland

8.0

7.6

7.2

-0.4

-0.3

-0.8

 

Northern Ireland

2.3

2.1

1.9

-0.2

-0.2

-0.4

 

Source: ONS

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Elly Gibson (Mon to Thurs) T: 020 7467 1337  M: 07900 910624  E: egibson@tuc.org.uk