Edinburgh UK's second most prosperous city

EDINBURGH is the most prosperous city in the United Kingdom outside London, and Glasgow is not far behind, according to a major new survey published yesterday.

An economic review of Scotland’s cities, comparing them with cities across Britain and Europe, showed that Edinburgh, Glasgow and Aberdeen were doing extremely well in British terms and better than expected against their European counterparts.

The report revealed that Edinburgh generated the highest per capita gross domestic product of any UK city except London, with Glasgow just behind. Aberdeen had the highest average earnings outside London.

Researchers took account of a range of indicators, from house prices to technology jobs. Their findings ran counter to the popular perception that Scotland’s economy lags behind the rest of Britain and Europe.

They showed that, at least as far as its big areas of population are concerned, Scotland can rival its European counterparts when it comes to making money and other measures of prosperity.

According to the report, Edinburgh generated 24,063 in gross domestic product per person every year. This was only slightly lower than London’s 24,090 and marginally better than Glasgow’s 21,905.

The performance of Scotland’s two main cities dwarfed that of other British cities. Liverpool was right at the bottom of the European league, generating only 11,307 per person in GDP every year while just above it were Newcastle (14,077), Manchester (14,489) and Birmingham (15,155).

The survey found that Edinburgh and Aberdeen had employment rates ahead of any of the English cities while employment growth in Edinburgh and Glasgow had recently outstripped all other cities in Britain except Manchester and Newcastle.

Aberdeen came out particularly well in the report, having some of the lowest house prices and the highest wages of anywhere in Britain.

The survey, commissioned by the Scottish Executive, was not all good news, however. The worst statistics came in research and development investment, where Scotland’s record is poor. A total of 126.63 was spent per person on research and development in Scotland, compared with 228.81 in the rest of Britain.

Even taking account of a 94 per cent boost in research and development spending between 1994 and 2002, Scotland still accounted for only 4.9 per cent of the UK’s expenditure in 2002.

This may help explain why Scotland’s cities are performing so badly on innovation and technology jobs.

According to the survey, Scotland fell behind numerous European regions as well as the south-west and the West Midlands in England in innovation, and behind most parts of Europe except the Netherlands when it came to high-tech manufacturing jobs.

Allan Hogarth, of the Scottish Confederation of British Industry, said: "The challenge is to try to build on the success of Scotland’s cities and on their strong performances; to spread that across the whole of Scotland."

Mr Hogarth said the lack of investment in research and development was a major concern and he said Gordon Brown, the Chancellor, had the opportunity in his Budget to provide extra tax credits for research and development.

Mr Hogarth added: "We should be improving Scotland’s transport infrastructure which will help improve our economic performance."

Tom McCabe, the finance minister, said the Executive had provided 90 million to help sustain growth in Scotland’s cities. He said: "I believe this report shows that our cities perform well in key areas against their UK and European counterparts and that is welcome."

But he added: "There are some other areas where we can do better and the Executive and the cities are working together with our partners across the public and private sectors to ensure Scottish cities can compete effectively on the international stage."

Edinburgh The capital is booming, with the highest GDP per head outside London (24,052), the most expensive house prices in Scotland and, again outside London, second only to Bristol in the United Kingdom. Edinburgh also has the highest proportion of its working-age population achieving qualifications to NVQ level 4 of any city in the UK. The city spends more on research and development than Aberdeen, Dundee and Glasgow combined.

Glasgow The dear green place’s traditional reputation as a stagnant and sluggish economy is blown away by the statistics, which reveal extremely strong GDP growth (to 21,905 per person per year). Glasgow has also benefited from the biggest drop in unemployment of any in the UK (down 45 per cent in nine years).

Liverpool The Mersey city has by far the smallest GDP figure per head in Britain (11,307) and its employment rate is among the worst in the country - level at the bottom of the league with Manchester and Newcastle - while house prices are lower than anywhere else in England.

A TALE OF 24 CITIES

Frankfurt 51,159

Munich 42,155

Stuttgart 36,801

Copenhagen 34,881

Amsterdam 26,245

Stockholm 24,544

Helsinki 24,261

London 24,090

Edinburgh 24,052

Milan 22,063

Glasgow 21,905

Bristol 20,219

Lyons 19,889

Dortmund 18,230

Rotterdam 18,003

Leeds 17,592

Turin 17,196

Toulouse 17,006

Birmingham 15,155

Manchester 14,489

Newcastle 14,077

Lille 13,865

Barcelona 12,669

Liverpool 11,307

*GDP per capita, source Barclays 2003