WATFORD GAP is geographically unremarkable but culturally iconic. The small dip between two hills in Northamptonshire is home to a motorway service station and marks the unofficial boundary between the north and south of Britain. In the popular stereotype, life on the other side of the Watford Gap is as foreign as life in a distant land.

That may not be far from the truth. An analysis by The Economist shows that regional income disparities have widened in several rich countries during the recession (see article), and are particularly big in Britain and America. The gap between Britain's poorest regions (mainly in the north and Wales) and its richest (in the south-east) has widened for the past 20 years. It grew worse during the recent recession, and is likely to widen again as government budget cuts fall disproportionately on poorer regions. GDP per head in the poorest quarter of Britain's regions is now lower than in the richest part of China.

Does this matter and, if so, what should be done about it? To most politicians the answer to the first question is self-evidently yes. “Slipping behind Shanghai” is hardly a vote-winning slogan. And all too often the answer to the second question has involved subsidies. The European Union's “structural funds”, more than a third of the EU's budget, are designed to shift cash from richer to poorer parts of the single market. America has pumped federal dollars into deprived regions such as Appalachia. Now Britain's coalition government is dusting off Thatcherite ideas for boosting left-behind areas with tax breaks: on March 5th George Osborne, the chancellor, announced the creation of ten “enterprise zones” that will get preferential tax treatment and simplified planning rules.

People not places

Unfortunately, the record of such regional-development efforts is poor. Despite massive transfers, the gap in economic vibrancy between Italy's richer north and its poorer south is still huge: only 40% of people in Calabria have a job, compared with 65-70% in Lombardy and Bolzano. Even policies that, in principle, should be helpful, such as improving infrastructure, are no panacea. West Virginia has masses of roads, but is still poor. And good intentions can backfire: “enterprise zones” and other regional tax incentives often shift jobs away from places that don't get the subsidy, rather than create new ones.

Instead of obsessing about revitalising lagging regions, politicians would do better to focus on the people within them. A region's prosperity is determined by its inhabitants' productivity and thus by people's skills, the scale of capital investment and the pace of innovation. These are bound to vary across regions. Cities are more productive than rural areas. But not all cities are equal: the characteristics that helped Manchester and Liverpool prosper in the 19th century, such as proximity to cotton mills and the sea, are less useful in the 21st century, when Britain's strengths—in finance and other skilled services—decisively favour London and the south-east.

This points to a different set of policies. First, make it easier for people to move. Given inherent gaps in regional productivity prospects, there is a case for boosting mobility from declining regions to prospering ones. In Britain the main problem is the fetish for home-ownership and high house prices in the south-east, partly the result of severe shortages of supply. Easing planning restrictions below the Watford Gap would be a better way of helping Britons than propping up the north.

Second, focus on education. In Sunderland only 21% of adults have any form of higher education, compared with 39% of Londoners. Though there are other ways that the British government can help boost productivity—from strengthening infrastructure to cutting red tape—the single biggest reward will come from improving northerners' educational performance. To be sure, the better-educated might then move. But they, and Britain as a whole, would be much better off.