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Labour 'red wall' seats hit hardest by wage stagnation, report finds | Business

The Labour party’s former political heartlands in the north of England, Midlands and Wales suffered from a tougher squeeze on wages and slower jobs growth than the rest of Britain over the past decade, according to a report.

In a report in to Labour’s former “red wall” seats the Resolution Foundation said the party’s former strongholds had been through a decade of “relative economic decline” since 2010.

However, the research also showed that some assumptions about the working-class communities that helped propel Boris Johnson to the biggest Conservative majority since Margaret Thatcher’s victory in 1987 are wide of the mark.

Rather than ranking as impoverished towns, with older residents and young people fleeing for big cities, the 50 seats analysed by the thinktank – which includes places such as Blackpool South, Blyth Valley and Great Grimsby – appeared to be closer to the national average for household income and demographics, and were better off than other Labour strongholds.

The snapshot of the seats that turned from red to blue in Labour’s worst election defeat since 1935 could help inform the party’s plans for regaining power as it holds leadership elections that culminate in April. However, Johnson is also preparing to ramp-up government spending outside London and the south-east in next month’s budget, with an ambition to cement his support in the new “blue wall”.

Average weekly pay graph.

In a sign of the challenge to boost living standards, the Resolution Foundation said that average weekly pay after inflation had fallen by 2.1% in these places since David Cameron became prime minister in 2010, compared with a loss of 1.5% for Britain as a whole.

Coming after a lost decade for wage growth across the country, it said the experience stood out in comparison to nearby Tory and Labour seats, where the pay squeeze had been less than half as severe.

The report found that overall employment in these northern and Midlands seats had risen by 4 percentage points since 2010, compared to 5.3 percentage points elsewhere, with the worst growth in higher-paying sectors of the economy.

But while the new Tory seats are poorer than its heartland constituencies, the study showed they did not rank among the worst-off places in Britain. Average incomes are around £1,100 lower than in a typical Tory seat, at £23,400 a year, yet Labour constituencies still rank as the poorest, with typical incomes of just £22,400.

Rather than being old, as observed by some analysts, the Resolution Foundation said the seats were firmly middle-aged, with the average resident aged 41. It also said younger people had been less likely to leave than in other Labour or Tory seats.

Home ownership is 1 percentage point higher than the national average, with 54% of families owning their home, helped by house prices being lower than in other parts of the UK.

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Painting a picture of stagnating towns with less interaction with other parts of the country, rather than hotspots of economic deprivation, the report found that fewer people left or moved to these towns. Immigration from overseas was also far lower than the national average.

The thinktank said people were much less likely to leave their local area to travel to work, with the shortest commutes in Britain at 24 minutes each way, with five out of every six people driving to work and only 2% getting there by train, compared to 6% in other Tory seats elsewhere in the north, Midlands and Wales.

Many of the post-industrial seats have been earmarked for transport improvements after a decade of austerity and generations without rail connections since the 1960s Beeching cuts.

Charlie McCurdy, researcher at the Resolution Foundation, said residents had been left with smaller pay packets, fewer jobs and less wealth compared with the rest of the country.

“Tackling this recent relative decline alongside the wider longer-lasting impact of the north-south divide should lie at the heart of the government’s levelling up agenda,” he added.

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