Gulf between North and South increases

The growing gap between the regions was illustrated in data released by the Office for National Statistics.

It shows that while the region's households have a higher disposable income than ever before, the difference between the North-East and the South-East continues to increase.

The report, based on snapshot statistics dating back to 2006, contains much good news for the region - with economic growth outstripping the rest of the country and the population rising after a decade of decline.

But the amount of money in the average North-Easterner's pocket is falling further behind the average Southerner as the region struggles to shed its reputation as a low-wage economy.

Figures show that for the period 2003-6, average weekly household income in the North-East was £455 - the lowest figure in the UK - while in Yorkshire and the Humber it was £529. The figures lag far behind London, on £766, and the South-East, on £687.

The average income gap between the North-East and London now stands at £311 - up from the £282 gap between the same two regions in 200104.

The survey also found that 36 per cent of North-East households had an income of less than £250-a-week, the highest percentage in the country and comparing with only 23 per cent in the South-East.

One-fifth of the region's household income is derived from benefits, again the highest proportion in the UK.

The region was also bottom of the table for average gross weekly earnings with an average of £400, compared with £499 in the South-East and £553 in London.

Last night, Fiona Hall, Lib Dem MEP for the North-East, said: "This is proof that the Government is wrong to claim that the North-South divide is a thing of the past. It is a reminder that the North-East deserves a needs-based funding formula.

"The Government must do more to help poorer households who are suffering from a time of rising fuel and food prices, as well as those low-income single workers who will feel the impact of the loss of the 10p starting tax rate very hard."

However, Nick Brown, Minister for the North-East, condemned what he described as the "shallow opportunism of the Liberal Democrats" and said: "Earnings and employment opportunities have been growing very fast in the North-East and the actual gap between the Northern region and the South is narrowing in terms of employment.

"The real comparison is between where the North-East is now and where it was ten years ago - and that shows there has been substantial progress, with more people in work."

Mike Parker, spokesman for the North-East Chamber of Commerce, said: "The North-East has the fastest growing regional economy in the UK, which is something that should not be underestimated.

"However, it is critically important that the region maintains that momentum and is not considered to be a low-wage economy.

If we are to retain and attract the brightest and best talents, people will want to see the salaries to go along with the employment opportunities that are there."

Pat Ritchie, assistant chief executive at development agency One NorthEast, highlighted the figures for economic growth, which were the best in the country and had exceeded the national average for three years, and the narrowing of the gap in employment rates.

She said: "The regional trends report shows very clearly that, whilst North-East England's economy still faces some significant challenges, we are heading in the right direction."

THE NORTH-SOUTH DIVIDE    

Class sizes: Average class sizes in primary schools 2006-7

  Average class sizes in secondary schools 2006-7

Economy: Value of goods and services produced per head in 2006
*Growing at 5.3% per year, the highest rate of growth in the country.

House prices: Average cost of a semi-detached house

Income: Average weekly household income 2003-6

Expenditure: Average weekly household expenditure

Benefits: The percentage of households in receipt of incapacity or disability benefits

Population: North-East population stood at 2.6 million in 2006, up by 16,000 since 2001.