Much has been made about whether the UK is coming out of recession or entering a double-dip recession. If you are one of those that doubts whether there is such a thing as a double dip recession then you are probably in the right.
If you look a little deeper into the statistics, you will see that London and the South East of London never had a double-dip recession in any event, the economies of these 2 areas did not go down at all through 2011 and 2012. The contraction of the economy that led to the apparent double-dip recession happened exclusively in the north of the country, the Midlands, Northern Ireland and Scotland and Wales. The South of the country remained fairly stable and was hardly effected by the shrinkage in the economy.
The 2009 recession was the worst and deepest and longest lasting for a very long time. Even then, during 2009, half of London saw no decrease in its economy or output.
But such micro-climates are not unusual. There are always mini booms and mini-busts all across the nation – maybe a factory or company goes bankrupt in a particular town, this leads to the loss of a large number of jobs in the area or maybe a new supermarket opens creating jobs or natural resources are found in a particular area. All these factors may not affect the overall economy of the country but could cause a particular area to flounder or flourish.
The problem now is that the gap is bigger than it ever has been between those areas struggling and those holding their own through the downturn in the economy. The disparity between areas in the United Kingdom is far worse than in any other European country and the gap has been getting steadily wider from 1995 onwards.
Northern Ireland is particularly suffering and there has been a sharp rise in suicides in young men, thoroughly depressed with trying and failing to find work, often falling into drug and alcohol dependency and poverty. In Hartlepool in the north east of England more and more young people are turning to associations and charities for cheap food as they struggle to find work.
But in London, businesses are expanding, struggling to find decent qualified employees. But still those on good incomes struggle to afford a home in many neighbourhoods, where a small apartment will cost you the same as an entire street in the Wales.
The figures are misleading and much of the recession is happening out of sight. Unemployment figures are not particularly high but many workers have had to take large pay cuts and UK workers are being over-looked for immigrants. Foreclosure figures are not as high as you would expect but this is because the banks are stepping in earlier and those struggling to meet payments are looking at alternatives to being made homeless, such as selling to the council and then renting the house back off them.
It is hoped the government will soon start to recognise and tackle the growing north-south divide, The Chancellor has hired a specialist Policy Exchange director who specialises in this area. Only time will tell.