CAPITAL GAINS
THERE’S STILL A HUGE GAP IN PRODUCIVITY BETWEEN LONDON AND EVERYWHERE ELSE
B USINESSES in London are continuing to outperform those in the rest of the UK leaving rural areas in particular struggling to catch up.
Figures released by the Office For National Statistics have revealed that businesses in London make an average of £39.30 an hour. That compares with just £24.90 an hour in Wales - the lowest in the UK - and £25.60 in Yorkshire and the Humber. London, the South East of England (£30.90 an hour) and Scotland (£30.00) are the only countries and regions where business productivity is higher than the overall UK average of £29.80. The amount businesses make per hour is a measurement which captures not just the value of the product or service created, but efficiency as well.
When the data is broken down even further, Inner West London which includes places like Westminster, Mayfair and Soho has by far the highest-value businesses.
Companies there make an average of £44.70 an hour.
That compares with £23.90 in West Wales and the Valleys.
Successive government have pledged to close the productivity gap between London and the rest of the UK.
Under David Cameron, the Conservatives launched the “Northern Powerhouse” initiative to try to stimulate business investment in England’s north.
There have also been calls to improve transport links outside the capital between major cities like Birmingham, Cardiff, Hull, Manchester, Leeds, Liverpool and Newcastle.
A Treasury spokesperson said: “Every part of the UK has a role to play in fixing the UK’s productivity gap and creating an economy fit for the future. “That is why the Chancellor created a £31 billion fund to support research and development, boost broadband, build more homes and improve transport networks – all vital to help us catch up with our competitors. “At Budget, we also announced further investment in new training programmes to equip our workforce with the skills needed for the modern economy.”