Capital heads UK's economic table

Published on Monday 23 June 2008 22:42

EDINBURGH has the strongest economy in the UK, outstripping even London, a report has revealed.

People in Scotland's capital produce 10,000 more a year for the economy than the UK average.

Experts believe the city's success is down to its status as a leading centre for the financial services industry – the home of companies such as Standard Life, the Royal Bank of Scotland and Halifax Bank of Scotland.

They also say creation of the Scottish Parliament and Scottish Government has fuelled the boom.

But the findings have ignited debate over the uncertainty of Scotland's constitutional future and the merits of plans to introduce a 3p local income tax.

Only Berkshire, which relies on London commuter belt wages, scores higher than Edinburgh's 28,432 produced per person.

And if London commuter belt areas are removed, Scotland has three cities in Britain's top ten, with Glasgow seventh and Aberdeen ninth.

Edinburgh beats London because of the UK capital's high house prices.

The figures in the report, by Scottish chartered accountancy firm Campbell Dallas, are based on Office for National Statistics findings for 1995 to 2005, the latest available, so are not taking into account the problems of the recent credit crunch.

David Lonsdale, assistant director of CBI Scotland, said: "This report reflects on the success story Edinburgh has been. But obviously, given recent events with the financial markets, it is important that the UK and Scottish governments help consolidate its status.

"I don't think uncertainty over independence has had much effect, but companies are keeping an eye on what happens."

But Labour warned that the Nationalists' push for independence might undermine Edinburgh and Scotland's success.

Iain Gray, Labour's finance spokesman, said: "These statistics show that Edinburgh has benefited hugely from the 11 years of a UK Labour government. But this growing prosperity is put at risk by the constitutional uncertainty caused by the current SNP government and the misguided plans to introduce a local income tax.

"Edinburgh's seismic growth is under threat if the SNP succeeds in making Scotland the highest-taxed part of the UK."

The report follows the Government Expenditure and Revenue Scotland (GERS) report last week, which showed that if Scotland claimed its 83 per cent of North Sea oil revenues, it would be performing better than the rest of the UK. The Scottish finance secretary, John Swinney, said the Campbell Dallas report underlined GERS's findings.

A spokesman for Mr Swinney said: "While there is no room for complacency, the Scottish economy compares favourably to the UK, with retail sales and house prices holding up well.

"Scottish growth outperformed UK growth in the last two quarters, and our labour market continues to outperform the UK average."

He added that replacing the council tax with a local income tax would mean a tax reduction in Scotland and said businesses had responded positively to the SNP government.

Campaign to drum up support to ensure survival of Tattoo

A CAMPAIGN to safeguard the future of one of Scotland's most prestigious events will get under way today, as it emerged that the Edinburgh Military Tattoo is worth 100 million to the nation's economy.

Business leaders and politicians are being urged to throw their weight behind a move to create a new-look arena for the world-famous event.

They will be warned that the existing spectator stands, which have been used for the event since 1975, need replacing within five years if the event is to survive. The Tattoo announced yesterday it hoped to have new grandstands up and running for 2011.

But a funding package needs to be in place by this autumn to meet a strict timetable for producing detailed plans and securing planning permission.

A Wimbledon-style debenture scheme is expected to be launched within a year to help pay for the 15.5 million arena, and the Tattoo is also hoping to strike a number of deals with major sponsors. Although the City of Edinburgh Council has earmarked 3 million for the project, it is understood that the Scottish Government will be asked to provide the same.

Linda Fabiani, the culture minister, is expected to be among the guests at tonight's event.

The nationwide economic benefit of the Tattoo was estimated at just 30 million four years ago, when a detailed study found that the city's year-round programme of events was worth 184 million to Scotland. However, work commissioned since then by the Tattoo has found that the economic figure for Edinburgh alone this year will be well over 50 million, with the nationwide amount likely to be about 100 million.

The average visitor to the Tattoo is expected to spend at least 300 in the capital during their visit.

More detailed work will be carried out during this year's Tattoo, tickets for which are already sold out, to help to build the case for the replacement of the spectator stands.