Geographical Inequality and Neoliberalism

The thinktank IPPR North have found “government spending in the north of England has fallen by £6.3bn while the south-east and south-west of England have seen an increase of £3.2bn since 2009-10.”

The graph makes for depressing viewing.

This isn’t an accident though, it’s systemic. It relates to my previous article about discussions regarding neoliberalism as a class project. As a reminder, David Harvey, Distinguished Professor of Anthropology & Geography at The Graduate Center, CUNY, has written a lot on neoliberalism, which he defines as the following:

“I’ve always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labour.”

IPPR North found:

“As many as 2 million adults and 1 million children live in poverty in the north… Weekly pay has fallen by £21 in the north since 2008, more than the national fall in pay, and half a million people work in accommodation and food services jobs where weekly pay is half the national average. Northern neighbourhoods have the lowest life expectancies in England, the report found.”

North West, as shown in the graph above, have experienced the biggest real terms cut in spending. North West were also the first to feel the effects of Universal Credit, as “Universal Credit was introduced in April 2013 in four postcodes in the North West” and “the North West was the first area where UC was rolled out to all Jobcentres.”

Adding to this geographical picture, The Equality Trust have produced an analysis of economic inequality in the UK.

This graph shows how the average household income differs according to each region, with geographical divides clear. For instance, consider the difference between the North West and South East; North West has had a -£3 billion reduction in real term public spending whilst having an average household income of under £30,000 whereas the South East have had a £2 billion increase in real term spending whilst having an average household income of around £40,000.

If we add analysis of wealth spread geographically the picture gets worse, as an average household wealth in the South East is around £340,000 whereas in the North West an average household wealth is around £180,000 – that’s around a 90% difference! But it is the North West that has been hit with the most public spending cuts, whilst the South East enjoy the biggest increase and we are told that times are hard and austerity is unavoidable.

In fact, London “ranks second to the South East of England in terms of HNW (High-net-worth) population and liquid assets…HNW individuals in the South East, as well as their liquid assets, are expected to register the highest growth over the next five years.” This concentration of wealth and thus capital power is important in a geographical sense, linking with neoliberalism being a class project to protect economic and political power of the corporate class. David Harvey has also talked about how corporate capital class interests are protected by the neoliberal state, despite rhetoric saying otherwise.

The graph below shows how inequality dramatically increased with the advent of neoliberalism in the 1980s.

This involves a move towards privatisation, the promotion of the free market, attack of labour rights and working conditions associated with a focus on supply side economics. Consider the closure of Consett’s steel works, with 3,700 jobs lost in the North East – an area with the lowest average household wealth as shown in the graph above – under Margaret Thatcher as an example of destroying labour power, symbolically and physically. Importantly, “the top fifth continue to dominate the income spectrum, taking almost half the income before and after the crisis.”

This geographical inequality is another example of the class project that has dominated the political and economic landscape of the last 30-40 years: neoliberalism. We are told there is no alternative, that austerity is a necessary evil as libraries are closed, education, social services and health care are cut whilst areas that are disproportionately wealthier see their public spending increase. This is hard to swallow and a big reason for why neoliberalism faces increasing threats to its ever decreasing legitimacy as more and more cracks begin to appear.

Jane Watkinson (she/her) is an anti-capitalist, intersectional feminist and vegan interested in Marxism, social ecology, sociology, revolutionary humanism, and studying radical social, economic, and political theory and how this can be applied in practice. She is a freelance researcher working in the community sector. Her LinkTree is here.