Economic History: The North-South Divide


In the last century, changes in the UK’s social and economic landscape have created significant regional disparities in areas such as wealth, income, unemployment and health. The effects of a post-war long-term industrial decline of heavy industries in the north, and a subsequent increase in the prominence of a modernised tertiary economy in the south have been widely attributed as the leading cause for the apparent divides continuing to affect the allocation of key resources to the population. As the difference of affluence between the north and south continues to increase, many are unable to understand the wider socioeconomic and political history behind the problems facing the UK today.  

To digest the North’s unforgiving decline, the circumstances surrounding its initial prominence must first be understood. Britain’s industrial revolution brought about an acute period of industrialisation in which vast amounts of life and energy were invested into the growth of industries primarily situated in the north. To meet the requirements of supply stimulated by great demand in the heavy and textile industries, there was a mass influx of people willing and able to move to find work. Many left their agricultural backgrounds in the country to find work at the factories, mills and coal mines teeming with opportunity for employment. And so, Britain was transformed into an industrial innovator and pioneers for the use of machines and infrastructure like steam engines and railways in an economy. 

The country’s transition into the 20th century would come with numerous economic challenges directly challenging the northern economy. First came the Depression of the 1930s. Britain’s labour force suffered record levels of unemployment as levels of unemployment exceeded a quarter of the workforce with 3 million people out of work. This lack of job security was felt greatly by Britain’s traditional manufacturing industries, industries formed of a primarily northern-based workforce. The ship-building town of Jarrow – near Newcastle – serves as a prime example of the effects of Britain’s industrial decline where unemployment levels rose to 73 percent of its working population. The historical importance of job security to affluence was magnified as the lack of an adequate welfare state drove the local economy of Jarrow into the ground. Many workers were left homeless or without access to essential commodities and so as general social welfare declined, unlawful activity began to rise. Today, the link between crime and unemployment in northern regions can be exemplified through Yorkshire and the surrounding north east where unemployment levels sit at a national high of 5.2% together with a national high of crime at 100 offences per thousand people. Crime and unemployment continue to form significant areas of regional disparity between the north and south of Britain.  

The emergence of World War 2, after an already draining and destabilizing World War 1, would prove to be another economic setback to the British economy. Britain emerged from the conflict with an enormous debt burden of  £21 billion. Of this amount, £3.4 billion was foreign debt, the equivalent to around one third of Britain’s annual GDP.  However, Britain’s financial predicament was a commonality between many other parts of the world and so time was afforded to catch up. Furthermore, Britain’s empire continued to dwindle along with national income from overseas operations. There was however, a greater upside to be had from the loss of Britain’s empire. National expenditure to fund wars elsewhere was reinvested into the British economy, transforming Britain into a world leader for highly technological industries like aerospace and as a provider of financial services. Financial institutions were formed through a series of takeovers of private banks and subsequently resulted in the formation of the high street bank. This surge in the prominence of the service sector worked to transform southern regions, in particular London, into the global service-providing hubs known today. From this economic transformation came the creation of many jobs in southern regions that were not afforded to local economies in the north. Local economies in the south experienced sustained growth in social welfare and wealth while in the north, widespread structural unemployment soared with no new jobs to replace the decline in traditional manufacturing industries.  

Today, the occupational immobility of the many low-skilled workers in the north prohibits any sustained growth and so perpetuates a cycle of poverty and its underlying problems. With territory comes higher rates of crime and premature mortality amongst other things. These factors work to demonstrate the northern economy never truly recovered from the long-term structural decline of Britain’s industrial economy. As this continues, Britain’s southern based tertiary economy goes from strength to strength as our financial account – monetary transactions – with other foreign economies continues to increase its value and contribution to the predominantly southern economy. It may be concluded that the north-south divide will continue to deepen without serious and significant attempts to improve the social mobility of the northern population and translate that into prosperity for their local economies. 


  1. Debra Leaker, “LFS: ILO unemployment rate: Yorks & the Humber: All: SA”, ONS, Dec. 15 2020
  2. “Crime rate per 1,000 population in the United Kingdom in 2019/20, by region”, Statista, Nov 2020
  3. Kelly Richards, “The Evolution of banking in the UK”, Cashfloat, March 14 2021
  4. Floyd Norris, “The World’s Banks Could Prove Too Big to Fail – or to Rescue”, The New York Times, Oct. 10 2008


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