The UK’s yawning economic inequality is not just social but also spatial.

Neoliberalism has brought with it a pronounced uneven geographical development. Some places have thrived while others have decayed significantly throughout the period.

This uneven development is stark, and Britain now has some of the deepest regional inequalities in the OECD.[46]

Whole cities have been thrown away, entire regions left behind, as communities have been tossed on the scrap heap,  with all the associated capital and carbon costs and wasted lives. This is despite pledges from nearly every government in recent times to address widening regional disparities.[47]

The UK now boasts the greatest regional economic inequality in Northern and Western Europe.

While central London is the richest region in Europe, the UK nevertheless has six of the ten poorest regions in Northern Europe, with West Wales, Cornwall, Lincolnshire, South Yorkshire, and the Tees Valley being listed by Eurostat, the EU’s statistical agency, as the five poorest regions across ten countries in Northern and Western Europe.

From the 1960s to the 1980s, median incomes in the West Midlands collapsed relative to the national average, while Northern Ireland staged a dramatic turnaround, rising from below-average to well above it by the 2020s. The North East, Wales, and Scotland have remained stubbornly below the British median, with the North West and Yorkshire and Humber also sliding over time. By contrast, London and the South East have consistently outpaced the national average, with London pulling even further ahead in recent decades.

The result is a deeply uneven economic map, where prosperity is increasingly concentrated and regional divides have hardened over generations.

Furthermore, many of the UK’s regions are increasingly falling behind regions in other advanced economies.

With the exception of London and the South East, all of the UK’s regions would rank amongst the lowest U.S. states in terms of GDP per capita.

Not only are Scotland, Wales, and Northern Ireland on very different trajectories to England, but England is itself made up of widely differing regions at increasingly disparate stages of development.

Regional GDP per capita offers a snapshot of this story. Looked at in 2020 constant prices and adjusted for purchasing power parity (PPP), the residents of different parts of the UK effectively live in the equivalents of vastly different countries at very different stages of development.

Somebody living in London, for example, is living in an economy the equivalent of Switzerland, or somebody living in the South East of England is in the equivalent of France.

Whereas people living at the other end of the regional scale are living in the equivalent of very different countries: the closest comparison – by Gross Value Added (GVA) – for the North East of England is the Slovak Republic; for Yorkshire and the Humber and the West Midlands, it’s Lithuania; while for the East Midlands it’s Poland, and for the South West its New Zealand.

Scotland, meanwhile, is closer to South Korea; Northern Ireland to Spain; and Wales to Hungary.

There is no longer a common story or unified direction for the countries and regions of the UK, many of which are now facing entirely different economic circumstances from those at the metropolitan core.

Economic policymaking in Westminster clearly serves the economic interests of London and the South East but is far from addressing the needs of not only the Celtic nations – which are on varying but distinct trajectories away from the metropolitan core of the British state, and thus away from the union – but also of the English regions.

This disconnect is literally codified into the policymaking processes of the British state.

The HM Treasury Green Book, for instance – a manual steeped in the assumptions of orthodox economic thinking – is effectively the UK’s Bible for conducting cost-benefit analysis in public policymaking and in particular for public spending decisions.

The models used by HM Treasury to assess the economic benefits of public investment in new transport links, for example, automatically skew the deployment of public funds towards London and the South East. This is because higher average wages in those regions mean that a greater economic value is placed on time savings there as compared to time savings for workers elsewhere in the rest of the country – actively fueling the cycle of regional inequality, because the supposed economic benefits of investing in richer regions will always be greater than in poorer ones.

The UK state is no longer fit for purpose for a growing number of its citizens in the devolved nations and regions, which is at least part of the explanation for the rise of Scottish and Welsh independence movements and of intensifying demands for a reunited Ireland. The London-centric and South East focus of Westminster and Whitehall is also giving rise to growing English regionalism.