This work examines regional wage variation and industry location. The research finds evidence of significant differences in the relative wage of high- to low-skilled workers – the 'skill premium' – across British regions. The findings suggest that relative wages for high-skilled workers compared with low-skilled workers are one-third lower in the South-East of England, where high-skilled workers are relatively more abundant, than in Wales or Scotland. A central explanation for relative wage differences is that regions specialise in producing different goods dependent on their relative endowments of high- and low-skilled workers. The research finds evidence that this is true in Great Britain – the greater the difference in relative wages between two regions, the less similarity there is in the range of goods they produce.