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Insolvency body’s concern over growing North-South income gap

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Eleanor Temple, chair of R3 in Yorkshire

Yorkshire residents have some of the lowest levels of disposable income in the country, according to new Government figures – news that has prompted concern from insolvency and recovery trade body R3 that the income gap between the North and the South is widening.

The latest regional gross disposable household income figures from the Office for National Statistics show that people in Yorkshire and the Humber had £16,119 per head to save or spend in 2017 after paying tax – lower than any English region except the North East.

This represents a slight fall of 0.2% on the previous year – the only UK region to see its gross disposable household income fall year on year. With inflation running at 2.6%, Yorkshire residents’ spending power will have fallen by even more, in real terms.

People in Kingston upon Hull and Bradford fared particularly badly. Hull residents had just £13,109 per head to live on after tax, the fourth lowest of any local area in the UK, while those in Bradford were left with just £14,199, the seventh lowest in the UK.

By contrast, residents in the London boroughs of Kensington & Chelsea, and Hammersmith & Fulham – the most affluent local area – had £60,343 per head after tax, almost four times as much as the Yorkshire average. The figures show that disposable income per head is increasing fastest in London (up 2.2% between 2016 and 2017), the South East, and the North East (both 1.3%). For the UK overall, gross disposable household income per head grew by 1%.

In 2017, Yorkshire and the Humber had the fourth highest overall rate of personal insolvency of any region in England and Wales, at 24 per 10,000 adult population (England and Wales: 21.4 per 10,000), up 11% on the previous year’s rate.

Eleanor Temple, chair of R3 in Yorkshire and barrister at Kings Chambers in Leeds, said: “Despite much discussion of regional rebalancing over the last couple of years, the gap between the North and South is continuing to grow as incomes in London and the South East escalate while those in Yorkshire and the Humber are falling.

“With many families across the region also seeing their incomes failing to keep up with inflation, the fall in comparative incomes is hitting them even harder. This is reflected in Yorkshire’s personal insolvency rate, and in the proportion of people with debt concerns, with 38% – over a third – of all adults in Yorkshire and the Humber worried about their current level of debt, according to recent research from R3.”

The figures from the Office for National Statistics give gross disposable household income (GDHI) per head, or the amount people had left to save or spend after receiving any benefits and after paying tax, but before housing costs. GDHI is considered a measure of ‘material wealth’.

They show the highest disposable incomes in Yorkshire and the Humber were in North Yorkshire (£20,271), East Riding of Yorkshire (£18,170), York (£18,049) and Leeds (£16,614). The GDHI per head for the UK overall was £19,514, meaning only one of the 11 areas in Yorkshire and Humberside had a higher GDHI per head than the national average.

Eleanor Temple added: “Debt problems can build up over time and have a serious impact on people’s mental health and their families. Those who are struggling should take advice from a charity or a professional and qualified adviser at the earliest possible stage.”