Wealth gap between city and Glasgow getting wider

Published on Thursday 8 November 2007 12:05

EDINBURGH has significantly increased the "wealth gap" between itself and struggling cities such as Glasgow, according to a new study published today.

The Capital's economic boom has seen its ability to generate wealth jump from 29 per cent above the national average to 46 per cent since Labour came to power in 1997.

Research by right-leaning think-tank Policy Exchange examined the fortunes of 18 towns and cities which have received significant government funding for urban renewal over the past decade.

It concluded that Britain's poorest towns and cities have fallen further behind in the past ten years despite more than 30 billion of regeneration initiatives.

The study concluded that the ability to generate wealth - measured as Gross Value Added (GVA) - in its sample of 18 poorer towns and cities had fallen from seven per cent below the national average to 14 per cent below in the last ten years.

By comparison, a sample group of successful towns and cities, including Edinburgh, had increased its lead over the average from 29 per cent to 46 per cent.

Business groups today said the diversity of economic interest in the Capital was helping it go from strength to strength.

Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said: "Edinburgh has done a good job of focusing on what it does well.

"The city has done well in taking forward areas such as life sciences or financial services that introduce new markets to replace areas such as traditional manufacturing.

"But as well as taking Edinburgh forward at macro level we have also been encouraging help at the other end of the scale.

"Initiatives such as the business incubators in Craigmillar allow the poorer areas of the city to also contribute to the creation of wealth that we are experiencing in Edinburgh."

The 18 struggling towns and cities in the study were: Blackburn, Blackpool, Bradford, Coventry, Glasgow, Hastings, Hull, Leicester, Liverpool, Merthyr Tydfil, Sheffield, Southampton, Stockton-on-Tees, Stoke-on-Trent, Sunderland, Walsall, Warrington and Wigan. The successful sample was: Edinburgh, Windsor-Maidenhead, Peterborough, Bristol, Milton Keynes and Swindon.

The report concludes that "successful towns are becoming more successful, poorer towns are becoming less successful". This is a trend reflected in personal incomes across the UK where the rich are getting richer and the poor are getting poorer.

Policy Exchange chief economist Dr Oliver Hartwich said the study showed that funding for problem towns and cities was not helping them catch up.

"If anything, they are slipping farther behind while successful towns are stretching their lead," he said.

"While we should not give up on urban policy, much of the 30bn spent in the last decade appears to have had no effect.

"Britain needs to consider policies that will make it easier for people to work in places that have high productivity and therefore offer high wages."

RISING COST OF LIVING

THE daily cost of living is soaring in Scotland because of a bad harvest and world fuel price hikes.

Grocery bills have reached record highs and unleaded petrol has broken the 1 a litre barrier for the first time.

The Scottish Retail Consortium's shop price index shows prices in all shops across Scotland were 1.1 per cent higher at the end of October than at the same time last year - the biggest rise since records began.

And the average bill for a weekly trip to the supermarket has shot up from 92 to 105 since June.

A loaf of bread is around 6p dearer, a pint of milk is up 5p and a packet of cereal costs an extra 20p.

Experts blame this year's extremely poor harvest and devastating summer floods.

And a global grain shortage has seen prices rise from 65 per ton two years ago to 117 per ton last month, while European stock has fallen dramatically.