London Wealth Masks Northern Poverty in Two-Speed U.K.

The compass tattoo on his right arm suggests a life at sea, though John Rose never worked on the trawlers that once plied the waters off the northern English city of Hull. He hasn’t had a steady job for almost 30 years.

Now 52, Rose came of age about the time the fishing port that had sustained the city fell into decline. Life as a sporadic disk jockey began in the early 1980s, when he decided he had no hope of finding regular work. Rose’s days are spent playing vinyl albums inside a rented garage near the port. News of an economic turnaround sounds to him like a broken record.

“There’s never going to be a recovery,” Rose said, rolling an unfiltered cigarette with fingers tattooed with “J” and “R,” his music collection stacked around him. “Since the ’70s, back when I was a kid, it’s just gotten worse and worse.”

His home of Hull, with a population of about 250,000, has an unemployment rate of 13.5 percent, the second-highest urban rate in the country after Hartlepool, according to the most recent figures from the Office for National Statistics.

Hull and other northern cities are a dark spot in a country whose future is looking brighter: Britain’s economy may grow by 3.2 percent in 2014, fastest among the Group of Seven, the International Monetary Fund said in June.

The recovery masks a two-speed economy juxtaposing the affluent south and the post-industrial north. The most recent unemployment rate in the North East region, the highest in the U.K., is 9.4 percent, while in the South East near London it’s 4.4 percent.

Closing Doors

Few places illustrate the gap better than Kingston upon Hull, the city’s full name. Storefronts are closed and shuttered in the city center. Inside the 100-year-old city hall, receptionist Deborah Precious, 59, swears she once saw the double doors to the abandoned holding cells in the basement open themselves at night when she locked up.

Hull was the U.K.’s second-most-bombed city after London in the Blitzkrieg of 1940-1941. Many of its scarred docks are now closed, removed or silted over, though the Port of Hull still handles container and bulk traffic.

Cuts to national public spending have weakened cities in the U.K.’s north, together with record low wages. Weekly earnings in the Humber region around Hull are 490 pounds ($814) on average, second-lowest in the U.K. after Northern Ireland.

For Peter Clark, 60, a retired boiler maker turned city council member for the Labour Party, low pay identifies Hull with the long-ago past.

“If you’re earning anything over 14,000 pounds a year here, you’re lucky. That’s film-star money,” he said. “If you brought Charles Dickens back and came to Hull, he’d feel quite at home.”

Jobs Plan

The town could alleviate its woes in 10 years if plans to attract investment and create jobs pay off, said Hull City Council Chief Executive Darryl Stephenson. The council is seeking to lure as many as 7,500 jobs within the next decade. In July, household products company Reckitt Benckiser Group Plc said it would invest 100 million pounds in a research center in Hull.

Chancellor of the Exchequer George Osborne pledged on Aug. 5 to pump new money into a “Northern Powerhouse” plan that would include high-speed rail, improved highway links and the transfer of powers and budgets to the cities.

Hull is excluded from the government’s 42.6 billion-pound project to build a high-speed rail route connecting London with metropolises including Manchester and Leeds, though a July report endorsed by Osborne calls for a further line linking five northern cities. Hull would be at the eastern end of the passenger and freight line, giving better access to London.

Siemens Investment

David J. Starkey, 59, a professor of maritime history at the University of Hull, says the city needs money invested from outside. “It’s about breaking that vicious circle,” he said in a phone interview. “The area suffers contraction in its key industries. Actually breaking the circle requires external investment.”

Some money is arriving. Germany’s Siemens AG and Associated British Ports are investing 310 million pounds to build a wind turbine plant on Alexandra Docks by 2017. Hull will assume the rotating title of the U.K.’s City of Culture that year, its heritage found in figures such as William Wilberforce, who fought to end slavery in the 19th century. The events and the preparation for them could create as many as 3,500 jobs, Stephenson said.

Signs of life in Hull include The Picnic Basket, a sandwich shop on Spring Street that has been catering to locals since December 2013. It is one example of entrepreneurship that secured funding from a business allowance system through the town’s Jobcentre nearby. Jo Conlin, 55, the shop’s owner, says the economic recovery so far has been encouraging.

Pickup Hopes

“If everything picks up it’d be great, because if it doesn’t, as a little business, it is hard,” she said, loosening her apron during a quiet moment. “We just have to hope it picks up.”

Hull City councilor Stephen Brady, 68, says government spending cuts have totaled 100 million pounds for the city since Conservative Prime Minister David Cameron’s coalition government took power in May 2010.

Deputy Lord Mayor Anita Harrison, 60, of the Labour Party, whose husband retired early after he was laid off as a truck driver, says the U.K. government’s message is that people in the North of England “don’t matter.”

“If you go to the City of London, there are vacancies all over. Waitress wanted, barman wanted, cranes, buildings everywhere. It’s thriving,” she said, holding her palms open. “The government is plowing all the money down South.”

City councilor Brady, also of the Labour Party, agrees that public and private investment has been concentrated in the south more than the north. He cited such projects as the six-year, 800-million-pound renovation of London’s St. Pancras International train station, the terminal for the Eurostar.

Rate Challenge

The Bank of England has a tough job setting one interest rate for a country whose regional economies vary significantly. Interest rates have been at a record low of 0.5 percent since March 2009.

BOE Governor Mark Carney said last month it’s not yet time to begin removing the central bank’s emergency stimulus. Rates could go up in 2015, a compilation of forecasts shows, making it more difficult for small firms to do business in towns such as Hull.

Margret Monkman’s nieces also are suffering from the job market. Monkman, 64, a retired nurse from North Bransholme whose husband, George, retired as a truck driver after being laid off, said all three are working below potential.

“All passed university with top grades and they’re working in call centers,” she said. “How degrading is that?”

DJ Rose’s collection includes one very personal recording, a seven-inch single of Standing in the Road by U.K. rock band Blackfoot Sue. “It’s about a guy standing in the middle of a road crying out for help and no one will help him,” he said.

“That’s been stuck in my mind ever since I was 10.”

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