If Gordon Brown can claim nothing else, he can claim this: he has brought the nation together. As the damning results of the local and European elections rain down on the Prime Minister, Britain is united in an outpouring of electoral anger.
Yet if the country has seldom been more at one politically, it is a striking facet of the legacy from more than a decade of Labour rule that, economically, vast tracts of the nation have rarely lain further apart.
In 1997, Labour inherited an economy that was already cleaved in two by the economic disparities of a “North-South divide” made deeper by the recession at the start of the decade.
Yet, despite 12 years of government by a party whose political heartlands lie in its poorest regions, and even after the longest unbroken run of economic expansion in the postwar era — a record that was once Mr Brown’s proudest boast — that divide has widened into a yawning chasm.
Economically, the UK now finds itself, as perhaps never before, a disunited kingdom.
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The scale of the huge divergence in prosperity that sunders the country is laid out in stark terms in an authoritative recent report from the Organisation for Economic Co-operation and Development. It highlights how, while the Brown boom allowed some parts of Britain to reap the fruits of an extraordinary upsurge in wealth, large tracts of the nation were left far behind.
The extent of this rift is remarkable. Britain has consistently seen a far wider range of economic performance between its best and worst-performing localities than almost all of its leading competitors.
Between 1998 and 2003, for example, economic growth across different local areas of the UK ranged between the drastic extremes of minus 1.2 per cent and 9.6 per cent, expanding the gulf between the poorest and the most prosperous.
These marked trends have persisted through the rest of the decade, further aggravating the national divide. The latest data for the 12 principal regions of the country show that total GDP growth from 2004 to 2007 ranged between 13 per cent in the West Midlands and in Wales to more than 20 per cent in London. The divergences of performance become ever greater, too, as one considers smaller localities.
The consequence is that the gap between the standard of living in the most affluent parts of the nation and its poorest areas is now wider in Britain than in any other developed economy.
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The most accepted gauge of living standards, GDP per head, stands at less than half the national average in the country’s poorest area, Anglesey — a place that is now poorer than the poorest parts of Poland. Yet, at the other extreme, Britain’s most prosperous area, West London, is more than four times wealthier than the national average — as well as being more affluent even than the richest comparable parts of America.
Such excessive and dramatic disparities within a single country inevitably throw up compelling challenges, threatening to inflame political and social tensions and hampering effective economic management.
Already, recent decades have seen several backlashes during periods of rising interest rates over the impact on poorer regions of a “one size fits all” monetary policy seemingly being set to counter overheating fuelled by an affluent South East. Such strains can only become more intense as the economic gulf grows ever wider.
What, then, will be the impact of the present recession? Until recently, some observers had argued that the slump would go some way to restoring a degree of economic cohesion to the country — albeit at a heavy cost.
The assumption was that, with the roots of the recession lying in the City and the financial industries, and that sector gripped by a savage retrenchment after the credit crisis, the downturn would bring about a “rebalancing” of the economy.
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Not only would the growing economic dominance of finance begin to be unwound, but this would also bring about a tilt away from London and the South East in favour of more growth in the manufacturing heartlands in the North. Britain would, in short, become less “bottom heavy”.
This prognosis is already looking badly flawed, however, and the old trends appear to be reasserting themselves.
In its first, brutal phase, it is true that the effects of the present recession were far more evenly distributed across the country than in the downturns of the Seventies, Eighties and Nineties. Yet, now, as a nascent recovery appears to be emerging, the initial indications are that this is being led by London and southern England. Meanwhile, the slump still appears to be hitting hardest in northern parts of the country, which also now seem to be bearing much of the brunt of soaring unemployment.
If this pattern continues, it can only mean that the distorting effect of London’s economic dynamism, fuelled by its diverse strengths, will persist through the emerging upturn. The capital, and its surrounding regions, will keep sucking in people and wealth, prolonging and further widening the national prosperity gap. The South will remain locked in a virtuous cycle, the North in a vicious one.
Those effects are liable to be magnified, too, by the impending reversal of Labour’s spending blitz which, for a decade, has papered over the country’s economic rift with public money. This has served to camouflage the problem, while simultaneously making it more profound.
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Large swaths of Britain have been left excessively dependent on taxpayer-funded activity that has crowded out the private sector and stifled enterprise. The State accounts for more than two thirds of the economy in the North East, Scotland, Wales and Northern Ireland. Now, with a protracted period of austerity in public spending made inescapable by the Government’s record plunge into the red, these regions will suffer disproportionately as the Treasury is forced to retrench.
For the next government, the dangers of the North-South divide look set to loom larger than ever.