2.5.36 Gross Disposable Household Income (GDHI) is an alternative measure of
regional income. GDHI is what is available for a household to spend or
save once taxes, social contributions, pension contributions and
property ownership have been taken into account. Arguably it is a closer
proxy for economic well-being than GVA as it accounts for
intra-regional commuting and includes non-work sources of income such as
pensions and investment incomes.
2.5.37 The distribution of
GDHI per head is narrower than earnings or GVA per head as the GDHI of
high earners will be reduced through income tax, while low earner’s GDHI
will be lifted upwards due to the benefits system. Across the country,
GDHI reflects this redistributive effect.
2.5.38 In the
South West, total GDHI was 79% of GVA in the region in 2008 - for
England it was 72% of the GVA figure. That year, the South West’s GDHI
was £76.5 billion, 9.9% of England’s total. This equates to £14,680 per
head of population with South West England ranking fourth out of the
English regions, behind the Greater South East (see Figure 2.5.10).
Figure 2.5.10 GDHI per head in the English Regions 2008
GDHI per head in the English Regions 2008 [Fig 2.5.10]. Contains OS Data; Source: ONS.
2.5.39 South West GDHI per head was 97% of the English average compared to a corresponding 89% for GVA in 2008. This suggests that the region is relatively better off on measures of disposable income than measures of gross output or income. This is because households within the region benefit from the redistributive effects of pensions, taxes and benefits and from other forms of incomes, such as earnings from outside the region.
2.5.40 GDHI Growth: Growth in regional GDHI tends to track national growth and certainly has done since 1998. GDHI growth rates peaked at around 7% per annum in 2001 before falling to between 3.3% and 5.1% between 2002 and 2008 (see Figure 2.5.11). The slower GDHI growth rates since 2001 partly reflect the increase in housing debt. We might expect the recession to have had an adverse effect on GDHI growth rates; however, this was not the case for 2008, the onset of the recession - rates both regionally and nationally were above those of both 2006 and 2007. These figures are perhaps a reflection of the relative strength of the labour market through the downturn (see Labour Market chapter for more detail), with the reduction in earnings being more than offset by low interest rates and the falling servicing costs of housing. There may also be stock market effects. We wait to see whether this positive picture is reflected in the 2009 GDHI figures released next year.
2.5.41 Over time, the region’s relative position on GDHI per head has been fairly stable, remaining at around 97% of the England average since 1998. As with GVA, London continues to outperform its peers and, subsequently, the gap between the best and worst performing English regions grew from 37 percentage points to 43 percentage points between 1998 and 2008. Again, subtracting London from the analysis reveals a stronger relative SW performance, with GDHI per head remaining consistently above the England average over the ten year period.
Figure 2.5.11 Annual Growth in total GDHI at current prices 1998-2008
Annual Growth in total GDHI at current prices 1998-2008 [Fig 2.5.11]. Source ONS.
2.5.42 Sub-regional GDHI: The north east and east of the region contribute the majority of regional GDHI - see Table 4. Gloucestershire, Wiltshire and Bristol/Bath accounted for 46% of regional GDHI, while Dorset and Somerset contributed just 25%.
Table 2.5.4 South West GDHI,
2008
| |
GDHI (£million)
|
Contribution to total SW
|
£ per head
|
Index England = 100
|
|
South West
|
76,471
|
100.0%
|
14,680
|
97.3
|
| |
|
|
|
|
|
Gloucestershire, Wiltshire and North
Somerset
|
34,973
|
45.7%
|
15,225
|
100.9
|
|
Bristol, City of
|
5,716
|
7.5%
|
13,568
|
89.9
|
|
Bath, North and North East Somerset, South
Gloucestershire
|
9,897
|
12.9%
|
15,322
|
101.5
|
|
Gloucestershire
|
9,277
|
12.1%
|
15,924
|
105.5
|
|
Swindon
|
2,916
|
3.8%
|
15,116
|
100.2
|
|
Wiltshire CC
|
7,185
|
9.4%
|
15,776
|
104.5
|
| |
|
|
|
|
|
Dorset and Somerset
|
19,030
|
24.9%
|
15,393
|
102.0
|
|
Bournemouth and Poole
|
4,770
|
6.2%
|
15,761
|
104.4
|
|
Dorset CC
|
6,468
|
8.4%
|
15,858
|
105.1
|
|
Somerset
|
7,792
|
10.2%
|
14,820
|
98.2
|
| |
|
|
|
|
|
Cornwall and Isles of Scilly
|
6,952
|
9.1%
|
13,010
|
86.2
|
| |
|
|
|
|
|
Devon
|
15,515
|
20.3%
|
13,592
|
90.1
|
|
Plymouth
|
3,063
|
4.0%
|
12,119
|
80.3
|
|
Torbay
|
1,734
|
2.3%
|
12,935
|
85.7
|
|
Devon CC
|
10,718
|
14.0%
|
14,201
|
94.1
|
|
Source: ONS
|
2.5.43 The highest GDHI per head is seen in Gloucestershire (£15,924) which is around 6% higher than the English average. Wiltshire, Bournemouth and Poole, and Dorset all have GDHI at least 4% higher than the English average. Plymouth, Torbay and Cornwall are the weakest performing areas in the region on this measure.
Figure 2.5.12 GDHI per head for South West sub-regions. NUTS3 2008
2.5.44 Although generally SW NUTS 3 GDHI per head figures indexed to the English average have not changed significantly over time, there are a few notable exceptions. GDHI per head in the Bath & North East Somerset, North Somerset and South Gloucestershire area moved from 6% above the England average in 1998 to 2% above in 2008 (with its ranking dropping from 1st to 5th), while the Bournemouth & Poole conurbation saw its relative position move from 3% below to 4% above the England average. GDHI per head in Plymouth has remained the lowest of the SW NUTS 3 areas since 1998, falling from 85 to 80% of the England average.
2.5.45 However, the redistributive effect of GDHI is also reflected in the NUTS 3 figures. Against the English average (=100) there is a 25.2 percentage point different between the best performing and the worst performing sub-region in terms of GDHI per head. For GVA per head, the equivalent variation is 85.9 percentage points.
