This paper presents some results of an empirical investigation of the locational implications of retrenchment, rationalisation and aggregate em ployment decline. It indicates that the present economic situation in the United Kingdom may be having certain distinctive spatial/regional repercussions. The paper examines in particular the changing distribution of employment between the depressed and ... [Show full abstract] the relatively prosperous regions of the country, and the con tinuing decline, as centers of manufacturing, of the major conurbations of the country. It is shown that both the intersectoral reorganization of production (the reallocation of capital between branches), and the differential impact of intra- sectoral attempts to reduce the cost of variable capital and increase the rate of surplus value, are contributing significantly to these spatial changes. Some of the political implications of this are mentioned at the end of the paper.