North-East's disposable income lowest in UK, ONS figures reveal

The latest figures from the Office of National Statistics (ONS) show areas where people have the highest income are not always those that contribute the most to the economy.

In some areas of the UK, economic output or productivity – the value of goods and services produced – may be high, but people’s household income may not match it, and vice versa.

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Income refers to disposable income per person in an area, so does not include living costs such as rent or mortgages.

In other areas, both income and productivity is low. This is true for North-East, although productivity here still higher than Northern Ireland, East Midlands, Yorkshire and the Humber and Wales.

It is the case for every area within the region, with just Sunderland bucking the trend.

The data, from 2018, shows Sunderland had below average income and above average productivity.

The city had an annual disposable household income of £16,000pp, -24.2 per cent lower than the UK average, and productivity of £37.10 per hour worked, which is 6 per cent higher than UK average.

According to experts, high productivity areas outside of London are often car manufacturing hubs like Sunderland, but the use of automation in industries mean this may not directly translate to well-paid jobs.

High productivity areas tend to be where there is car manufacturing. Picture: PA

The case is reversed in North Yorkshire, where income is above average but productivity is below average.

Andrew McPhillips, chief economist at the Northern Powerhouse Partnership, said: "Areas of high productivity outside of London, such as Sunderland, are generally locations of car manufacturing. Though productivity is higher than average, wages are lower.

"One reason is that those who work in Sunderland don’t necessarily live there. This is also the case in North Yorkshire where wages are higher than average but productivity lower due to the effect of commuting patterns.

"Another reason is that car manufacturing is highly automated, meaning it needs fewer employees. This means those on higher wages from more productive industries still only make up a small proportion of the population.

"Investing in skills is key to raising productivity and incomes, as it allows more people to access better-paid, more productive jobs. A skilled workforce, in turn, attracts new companies as well as helping existing businesses to grow."

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South Teesside had the lowest levels of disposable income in the region at £15,764, -25.3 per cent lower than the UK average.

Meanwhile, productivity sat at £28.20 per hour worked, which is -19.6 per cent lower than average.

The area with the highest levels of disposable income was Hartlepool and Stockton-on-Tees, grouped together, at £17,243 – still -18.3 per cent below the national average.

Productivity here also sat at £33.80 per hour worked, -3.5 per cent lower than UK average.

Darlington residents have just £103 less to spend in their pockets.

Tees Valley Mayor Ben Houchen said: "Since I was elected in 2017, I've been working tirelessly to create well-paid, good quality jobs and these figures aren't reflected in the fantastic quality of life you can have right here across Teesside, Darlington and Hartlepool.

“Our ten-year Investment Plan starting in 2019 will do just this, revitalising communities and driving growth. In the past three years we’ve bought and are growing Teesside Airport, launched Teesworks, become the UK’s largest Freeport, announced GE will build a new state-of-the-art facility to manufacture blades for offshore wind turbines, we're set to become home for the UK’s Centre for Hydrogen Transport, and over 1,000 Government civil servant jobs are coming to Darlington. 

"We’re getting on with the job creating the good-quality well-paid jobs that will help transform the Tees Valley.”

Here's the situation across the region:

County Durham - Annual disposable household income of £16,542pp (-21.6 per cent lower than the UK average) and productivity of £29.80 per hour worked (-15 per cent lower than UK average)

Darlington - Annual disposable household income of £17,140pp (-18.8 per cent lower than the UK average) and productivity of £34.80 per hour worked (-0.8 per cent lower than UK average)

Hartlepool and Stockton - Annual disposable household income of £17,243pp (-18.3 per cent lower than the UK average) and productivity of £33.80 per hour worked (-3.5 per cent lower than UK average)

South Teesside - Annual disposable household income of £15,764pp (-25.3 per cent lower than the UK average) and productivity of £28.20 per hour worked (-19.6 per cent lower than UK average)

Sunderland - annual disposable household income of £16,000pp (-24.2 per cent lower than the UK average) and productivity of £37.10 per hour worked (6 per cent higher than UK average)

Tyneside (Gateshead, North and South Tyneside, Newcastle, North and South Shields)  - Annual disposable household income of £16,605pp (-21.3 per cent lower than the UK average) and productivity of £29.10 per hour worked (-17 per cent lower than UK average)

North Yorkshire - Annual disposable income of £22,354 pp (5.9 per cent higher than the UK average) and productivity of £27.60 per hour worked (-21.1 per cent lower than the UK average)