Alarm bells should sound for the region’s economy as the North East drops behind Wales for average pay.
For the first time in years people in Tyneside, Northumberland and County Durham are taking home a lower average salary than those in Wales.
The drop in pay is proof that the region needs a dedicated economic steering group, argues policy experts from the Trade Union Congress.
“The figures are significant because Wales is better equipped as a region economically. I do worry about the North East with what’s going on in Scotland in that we will be left with no real tools to make the level of difference that we need and that people in this region deserve,” said Neil Foster, policy and campaigns officer for the TUC Northern Region.
Figures from the Office of National Statistics (ONS) show that the North East was the worst paid region in the UK in 2013 with an average salary of £24,084. In London pay is £35,238 a year, and the UK average is £27,017.
Average pay in Wales is just £100 more a year on average at £24,182, however the country has regularly been used as an economic indicator to judge the North East’s progress.
Mr Foster said: “There’s lots of similarities between the North East and Wales so the fact that we have gone behind them should ring alarm bells.
“The fact that we have slipped behind Wales is significant because they have got an assembly with the economic powers to stimulate the economy and provide good quality jobs in the most productive sectors.
“The fact that we don’t have a Regional Development Agency means we should be saying to Whitehall that they must devolve economic powers to our regions. If you are given the tools you can create economic prosperity.”
The TUC said the latest pay figures show a rise on paper, however inflation meant a real terms cut.
The statistics show that in the North East the average wage was £17,430 in the year 2000, rising to £24,084 last year. This 38.1% increase in wages was the slowest percentage increase anywhere in the UK.
In 2000 a North East resident earned £1,418 less than the national average, but by 2013 this had grown to £2,933, demonstrating a cut people’s spending power.
Pay in London has continued to rise faster than almost anywhere in England, however Scotland has risen the fastest with their average annual wage up 46.8% from £18,029 in 2000 to £26, 472 in 2013.
Reintroducing a regional economic governance body is the only way to put the North East back on track, Mr Foster argues.
“I don’t think it’s inevitable the North East has to be the lowest paid region but unless there is change, it will be very difficult to predict with any confidence that things will be getting better soon,” he said.
Earlier this week TUC Northern Secretary Beth Farhat said ONS figures also revealed a worrying trend for women in the North East as there has been a 20% rise in female unemployment in the last 12 months – from 49,000 up to 59,000.