Bill Jamieson: Edinburgh-Glasgow vision resurrected

Electrification of the main Edinburgh-Glasgow line will be a start albeit a rather late one. Picture: PA

All hail Jim O’Neill, the economist whose plans for a northern regional powerhouse are gaining traction. His vision to revive the great English cities with infrastructure investment has inspired hope and cross-party sympathy. Major gains could be in prospect. But if he has lit a spark for northern English cities, what of a similar ignition here? Should Holyrood not invite him to revive those similar aspirations we had for a Central Belt powerhouse?

News this week of the £250 million contract to electrify and improve the main Edinburgh-Glasgow rail line is encouraging. But it has been long in coming and falls well short of the high-speed link required.

Years ago there was talk of Glasgow-Edinburgh collaboration and the huge benefits it promised. The energetic Laura Gordon headed up a joint body, set up by Jack McConnell and funded by the two city councils and Scottish Enterprise. Meetings were held, papers produced, framework documents flourished and strategy agendas waved. It all fizzled out. Plans for a high-speed rail link foundered. Edinburgh, in one of the worst cases of Fat Fingers Syndrome, hit the wrong button, missed the Edinburgh airport rail link and pressed on instead with the tram project. Business and office development plans were lost in rival zoning policies. Scottish Enterprise subsumed the initiative.

It is time, surely, to look afresh at what we could have achieved and move on from exclusive focus on constitutional politics. It drains attention from the other purposes of government and in particular long-term economic improvement.

If the northern cities get their act together, Scotland could be a big loser. We risk being trapped by a paralysis of ambition and an inability to move on with projects that could make a marked contribution to our prosperity and wellbeing. Liverpool, Manchester, Leeds, Sheffield and Newcastle believe their proposals for investment in road capacity, a new high-speed rail link across the Pennines and better access to Manchester airport – a £15 billion programme over 15 years – would create a “connected region” powerhouse to challenge London.

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London and the south-east have received the lion’s share of infrastructure spending in past decades. According to KPMG, the capital spends as much on infrastructure every two days as Manchester does in a year. There is now wide cross-party recognition this imbalance must be reversed.

Three major obstacles stand in the way, ones all too familiar in a Scottish context. The first is money: from where would these billions come to finance an ambitious infrastructure uplift? The Treasury was quick to clarify that although the £15bn figure would “inform our thinking… it should not be read as a commitment to fund £15bn”.

Such spending requires a massive commitment of public and private funds. Do we have the political will to make it? While government spending in Manchester remained flat over the past three years, budget cuts shifted money from council budgets and transport and skills investment into social security spending, up by £450m.

The second obstacle is planning. The approval process for such development is likely to be lengthy, particularly for the proposed Trans-Pennine rail route, which passes through an area of outstanding natural beauty and could raise concerns on a par with those being seen over HS2 in the Chilterns.

And the third is deeply ingrained local rivalry. This dislike of our immediate neighbours bedevils ambitions to create regional government centres to counteract London. Proposals for a south-west regional government are vehemently opposed by Cornish people who no more care for being ruled from Plymouth (“diabolical Devon”) as from London. Just as relations between Glasgow and Edinburgh have been marked by distrust and rivalry, it has been difficult to overcome rivalries between Leeds, Manchester, Birmingham and Newcastle.

But the benefits provide a powerful incentive to move forward. O’Neill’s global perspective on urbanisation – he coined the Bric acronym for emerging economies while at Goldman Sachs – has brought a compelling perspective to his argument. By 2015, he points out, 70 per cent of world population will be urban. McKinsey research shows that, while mid-tier cities are now home to only 7 per cent of the population, by 2025 they will generate 19 per cent of growth.

“Many successful countries, including China, Germany and the US,” O’Neill points out, “have a number of vibrant cities. The UK, by contrast, is dominated by London, whose unique role as a home to the best and the brightest from the most dynamic economies is turning it into ever more of a global city. Making [cities] more competitive should be a central challenge for economic policy.”

University of Manchester researchers have shown the extent to which regional income and output disparities have grown in the UK. The north-east, north-west, and Yorkshire and Humberside have slipped back relative to London and the south-east between 1995 and 2008 – and they are set to be left even further behind. “All three of these declining regions now have output per capita less than half that of London, and if we extrapolate past trends, their per capita output could be around one-third that of the London level by 2029”.

These concerns have long been well understood in Scotland. Very similar concerns lay behind the Glasgow-Edinburgh city collaboration initiative. This grew out of the Scottish Executive’s “Cities Review” in 2003 which argued that considerable benefit could be gained for Scotland as a whole through their increased collaboration.

A “historic concordat” was signed in June 2006 and Laura Gordon appointed. Three action areas were identified: connectivity (physical and digital); focus on key growth sectors; and international openness/promotion and talent attraction.

“To catapult the combined metro region of Glasgow-Edinburgh into Europe’s first league of metropolitan regions,” she said, “additional investments in transport infrastructure will be key, i.e. high-speed trains between Glasgow and Edinburgh supplemented by a thoroughly improved metro mass transit system leading to better connectivity also for sub-regions.

“No-one needs reminding,” she added, “of the recent decision by the Bank of New York to locate its headquarters with 4,000 jobs in Manchester, after deciding Edinburgh would not have enough of a population spread to cater for jobs growth.”

The initiative was welcomed by business leaders such as David Watt, executive director of the Institute of Directors in Scotland: “The Scottish economy can only be strengthened by Glasgow and Edinburgh working together to create an even more vibrant hub of economic activity across the Central Belt”.

The impetus faded, the initiative wound up and the baton passed to the more diffuse Scottish Cities Alliance. But its central argument and focus can be found at the heart of Jim O’Neill’s report – the most promising initiative yet to revitalise England’s northern cities.

“More powers” should not prevent us from taking his arguments to heart. The need to stay competitive is as compelling as ever – and empowering our great cities is key to this.

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