I've always mentally put it up north somewhere, and I'm not alone. In this article, written in 2006 to mark the ad's being chosen "the nation's favourite", the writer places it in "a northern town". And this evening, one of the pundits on Radio 4's Powers of Persuasion twice mentioned the north in general, as well as Yorkshire in particular.
I'd read somewhere that the ad was actually filmed in Shaftesbury, Dorset, but I never wavered from my belief that the fictional setting was the north. [EDIT: As Kalimac points out over on the Dreamwidth version of this post, even the website for the hill in Shaftesbury where it was made mentions that the setting is "a northern industrial town".] After all, there's that brass band, and the voiceover is in a Yorkshire accent.
Except - it isn't. It's a West Country accent - quite possibly a Shaftesbury one. Listen for yourself:
I was only ten when the advert aired, and until they played it on the radio for the documentary this evening, I hadn't seen or heard it for years. Somehow, in the interim I grafted a northern accent onto my memory of it. That's a little odd, but what's more extraordinary is that the entire nation seems to have done the same thing. Even tonight, experts on the advert were talking about its northern setting, despite just having heard it.
Why? Is it the flat cap? (But people wore those in the south, too!) The brass band? That must have a lot to do with it.
Perhaps too there's a sense that a certain style of working-class nostalgia belongs properly to the north of England - or even that there is no southern working class at all?