The economic divide between the North and South is beginning to close, a new study suggested today.
Research into the competitiveness of companies in different regions showed the first "compelling evidence" that the gap was closing, it was claimed.
For the first time since the so-called Competitiveness Index was launched six years ago, London, the South-east and eastern England all registered a fall, while the traditionally least competitive areas of Northern Ireland, Yorkshire, Wales and the North-east all showed big improvements.
However, the West Midlands dropped one place in the index. The region is now ranked seventh out of the 12 UK regions.
The West Midlands held on to the top slot for the proportion of exporting companies within a region – a measure of its potential tradability – with 3.2 per cent. But this did not translate directly into the value of sales, where the region stayed in seventh place.
Nevertheless, the region made small but significant gains on a number of measures.
It was one of few regions to increase its productivity score and moved up from eighth to seventh spot.
Regional gross weekly pay increased by 3.2 per cent compared with a national average of 3.3 per cent, again moving the region up one place to seventh.
It improved regional GCSE results, moving from tenth to ninth in the rankings. And the region also increased the proportion of working age population, with an NVQ level 4 qualification or higher between 2003 and 2005 from 21.1 per cent to 23 per cent, moving it from 11th to ninth place.
But business investment in R&D in the region fell by ten per cent, dropping the West Midlands one place in the rankings to seventh.
Dr Robert Huggins, who compiled the index, said: "For as long as most of us can remember, the story of the UK’s economic performance has been a tale of two nations – the go-ahead London and South-east region and the north and west of the country stuck in the doldrums of post-industrial blight.
"This year’s index represents the first signs that a new chapter is about to be written.
"It is a hugely positive development that the Government’s devolution and regional development policies may at last be bearing fruit.
"Whilst there may be more that policymakers can do to devolve power – for example to cities and city regions – the signs are that strategic development through devolved institutions and regional development agencies is starting to make a difference.
"Targeted regional investment appears to reduce unemployment and lift regional competitiveness."
London remained the central and overriding economic powerhouse.
Out of the top 25 most competitive localities, 23 were in the capital and around the South-east.