• Swindon & Wiltshire Economy
• Monday January 20 2025
• Author Name: Peter Davison

Pay gap between London and rest of UK laid bare in new report

The pay gap between London and the Greater South East and the rest of the UK has been laid bare in a new report.

Economic think tank the Centre for Cities published its latest Cities Outlook today (Monday).

Every year the organisation compares the economic fortunes of the 63 largest cities and towns in the UK. And every year it focuses on a different aspect of the economy.

Last year’s report honed in on productivity – in which Swindon fared particularly well .

This year -the 18th year of the report – the spotlight was on wages.

In the report, graph after graph showed the disparity between the wealth and prosperity of London, the Greater South East, the South, and Midlands and North, including the post-industrial towns of the north of England.

The report measured the regions against the 2024 Average Weekly Workplace Wage of 2024 – £716.

By region, only the urban areas of the Greater South East and Scotland exceeded that figure. All the UK’s other urban centres, and all of the UK’s non-urban areas – came in under that.

Boil the figures down to individual cities, however, and wages in Reading (£857), Bristol (£756), and Swindon (£735) all exceed the national average – but they were three of only seven UK towns and cities to do so.

In fact, so skewed are average wages in London (average weekly wage £950) that they are nearly £20,000 a year more than average wages in the least prosperous parts of the UK – Burnley, Huddersfield and Middlesbrough.

The disparity means that by early August, the average earning Londoner will have been paid what the average earner in Burnley earns in 12 months.

Reading, Bristol, and Swindon all performed well. By August Bank Holiday the average-earning Readingensian will have hit the annual wage of the average-earning Burnleyian.

By the end of September the average-earning Bristolian will have reached the target, the average-earning Swindonian not far behind, reaching the Burnleyian’s peak in the first week of October.

The report looked for a correlation between average wages and the types of economy individual towns and cities had, which could be broadly divided into ‘local economies’ – hairdressers, mechanics, conveyancing solicitors and estate agents – and ‘export economies’.

In the 1980s those exporters would have been manufacturers. Today, the biggest exports are services, and cities with a large services sector tend to be far more prosperous. Instead of goods, today’s most prosperous cities are exporting knowledge.

With its high prevalence of IT and communications service industries, Reading (2nd behind Slough) performed particularly well, as did Swindon (4th, behind London), possibly boosted by large service-based employers like Nationwide and Zurich. Bristol, which has a more mixed economy, with many firms servicing their own population, was mid-table at 30th.

Why does any of this matter?

Because in 2025 we are six months into a new government whose focus is economic growth. And when you look at the potential for economic growth, a different picture emerges: with the right investment Coventry, Worthing, Hull, Newport, Plymouth and Liverpool all have the greatest potential for jobs and wages growth.

“Policy should attempt to make places the best possible version of themselves, which will put more money in people’s pockets,” say the report’s authors.

“Over half of Britain’s 62 largest cities and towns are below their potential currently, showing there is scope for policy to have an impact.

“Local plans should attempt to make Burnley the best possible version of itself, and this would put more money in people’s pockets in Burnley and its surrounding area.

“But when it comes to improving regional prosperity and national economic performance, it is clear that addressing the underperformance of big cities, as identified in the Industrial Strategy Green Paper, would have a bigger impact than for smaller ones.”

A tale of three cities: Bristol, Swindon and Reading in numbers

BRISTOL

Population (2023) 782,437 (8/63)
GVA (2022) £30.9 billion (4/63)

Manufacturing jobs 5.6 per cent
Private knowledge services jobs 20 per cent
Publicly-funded services jobs 28 per cent
Other private services jobs 37.4 per cent
Employment rate 80.3 per cent

Average weekly workplace earnings, 2024 £756 (11/63)

SWINDON

Population (2023) 238,417 (43/63)
GVA (2022) £10.1 billion

Manufacturing jobs 5.4 per cent
Private knowledge services jobs 16 per cent
Publicly-funded services jobs 21 per cent
Other private services jobs 46 per cent
Employment rate 82.5 per cent

Average weekly workplace earnings, 2024 £735 (13/63)

READING

Population (2023) 362,066 (25/63)
GVA (2022) £ 19.7 billion (9/63)

Manufacturing jobs 3.6 per cent
Private knowledge services jobs 25.6 per cent
Publicly-funded services jobs 22.6 per cent
Other private services jobs 38 per cent
Employment rate 84.2 per cent

Average weekly workplace earnings, 2024 £857 (4/63)

All data cherry-picked from https://www.centreforcities.org/city-by-city/ where lots more data is available