Workers in the south east of England - the most well-off region in the country - earn up to 25% more than those across the rest of the UK, new research shows.
The Institute for Fiscal Studies (IFS) has produced a report on poverty, inequality and living standards, which shows that while the gap between the richest and poorest has narrowed, there are still huge disparities between regions.
Since the late 2000s the incomes of low-income households in London have risen by more 10%, while those of high-income households have fallen by the same amount.
But the average income in the west midlands is 25% lower than that in the south east, and average incomes in the south of England and Scotland have grown faster than in Britain as a whole over the last four decades.
The Lib Dems accused the government of creating “geographical ghettos of poverty” as the findings also show a quarter of poor children live in the 10% most deprived local authorities.
Party welfare spokesman Stephen Lloyd said: “This report shows for the first time we are creating geographical ghettos of poverty that are trapping a generation of people and their children.
“The government for all their talk about strivers and the just about managing are actively doing nothing to help. These good people are being hauled below the waterline, which is unacceptable.
“It is time to stop slashing social security, create a proper living wage and help those in need. In Britain, in 2017 no nurse should be going to a foodbank, this is a stain on our country.”
The figures show average earnings for working households have only risen by 3.7% since the recession and the number of people living in the government’s definition of “absolute poverty” has changed little over the last decade.
Campbell Robb, chief executive of the Joseph Rowntree Foundation, a charity which lobbies for social change, said: “These alarming figures highlight how far behind some parts of the UK have fallen, with millions of people seeing their incomes stagnate, or even worse, decline. Rebalancing our lopsided economy must be a priority if we are to create a country that works for all.
“Average incomes in the midlands, Wales and the north of England have fallen further behind the rest of the country. Low earnings are an increasingly important driver of poverty, with the proportion of children in poverty in working households rising sharply in recent years.
“The government must make urgent progress with its industrial strategy, working across party times to deliver a plan that drives up skills and productivity across the country. That will deliver more and better jobs and higher living standards that people desperately need.”
Between 2010–2011 and 2014–2015, 37% of people experienced a fall in their household income of more than 5%, and 50% saw a rise of more than 5%.
Robert Joyce, IFS associate director and co-author of the report, said: “Although the post-recession years have seen modest income growth, with little change in poverty rates and inequality, many people have seen large changes in their incomes. Fluctuating incomes mean that many fewer people are classed as persistently poor than have a low income at any point in time.”