13 Mar 2014
I recently made a brief visit last week to London - or the 'dark star' as I understand we must now consider it - to attend a seminar on urban policy. A bit dry you might think and perhaps a little abstract for a Chamber of Commerce. Well, there were several reasons why I chose to make the trip.
First, a new paper was being launched at the seminar by an old friend of Glasgow's urban development, Greg Clark. Some of you will know Greg from his annual hosting of Glasgow's State of the City Economy conference and Greg has also been one of the speakers in the Chamber of Commerce and Clydesdale Bank Glasgow Talks series. He has provided constant encouragement in helping Glasgow develop its economic strategy.
Secondly, the joint author of the paper was Greg Clark MP, Minister of Cities in the UK Government. No, not the same Greg Clark; there are two. Both directly involved in government policy on cities, for sure, but one specialising in urban development all across the world and the other a member of the Government. Recently the Chamber expressed its support for the negotiation of a City Deal for Glasgow and I wanted to hear more about the direction Westminster is taking with the devolving of power and funding to English Cities through its City Deal programme.
Finally, a lot is happening to English Chambers of Commerce because of a report written by Michael Heseltine - who was also at the event - urging the devolution of powers and resources to English Local Enterprise Partnerships and for a greater role for Chambers in the LEPs' work.
I specifically mention the visit because London is a hot debate topic not just because of theFirst Minister's New Statesman speech but because of the BBC's Mind the Gap programme. London we are told is over-dominant economically and sucks all the talent out of the rest of the country.
There's no doubt London is doing well. Its population grew by nearly a million between the censuses of 2001 and 2011. We can think of sectors like the creative industries or financial services where London is the fulcrum of so much that goes on in the UK. According to the Clarks' paper London has 13% of the country's population and generates 22% of the country's GDP.
But the Clarks lay out several other cities where the figures are much greater. Buenos Aires, Johannesburg, Tokyo, Stockholm, Paris, Vienna and Seoul all contain larger shares of population in their countries and higher - often much higher - shares of national income. Stockholm, for example, has 26% of Sweden's population and contributes 32% of its national GDP. Buenos Aires has a staggering 32% of Argentina's population and accounts for just under half of its national income. So the relative size of London is not in itself remarkable.
Why London's success gets more negative comment is almost certainly because of the light it shines on the performance of Northern cities. The Clarks show that, of the eight largest cities in England outside London only one (Bristol) has a GDP per capita above the national average. In Germany, all of the eight largest regional cities outside Berlin sit above the national average. In Italy, it's six out of the eight.
If you look at the recent Cities Outlook report from the Centre for Cities it's noticeable that the statistics show quite convincingly that there is a talent flow from regional cities into London. Amongst the 10 largest cities in the UK, London has the highest share of its population possessing degree level qualifications at 47%. For Manchester it's 33%, Birmingham 26% and Liverpool 23%.
So that's why much more attention is being paid in urban policy down south to measures which can improve the performance of regional cities. Amongst these has been the introduction of City Deal. Under City Deal some 28 cities have been negotiating a devolved package of powers and resources to suit their particular needs. These are not small deals. Manchester established an Earnback arrangement which commits the UK Government to pay up to £1.2 billion towards infrastructure investments made by the Greater Manchester Combined Authority if economic growth can be shown to have followed from the investments.
One interesting aspect of these deals is that cities are encouraged to look beyond their boundaries to their wider city region. The Manchester deal involves all 10 authorities of the Greater Manchester region. That reflects the real economy of the city rather than the artificial political boundaries.
So what might this all mean for Glasgow?
To begin with it's not at all clear that London's 'dark star' talent suction machine reaches so convincingly across the border. Both Glasgow and Edinburgh retain very high percentages of their qualified residents. Glasgow's share of population with degree level qualifications is 41%, second only to London in the UK's top 10 largest cities. Edinburgh's is even higher.
On the other hand, there does appear to be a positive relationship between population growth and proximity to London. In the last decade, Birmingham's population grew by 154,000, Manchester's by 129,000. For Glasgow the figure was 12,400. London may be sucking some of the high level talent out of the regional cities, but it is also helping attract new talent in. Glasgow appears to be sufficiently distant not to be so severely affected by the sucking machine, but nor is it benefiting from London's global magnetic appeal.
Intriguingly though, Glasgow too is set to benefit from a City Deal negotiation and the deal is being struck at a City Region level. That deal is being struck directly with Westminster. Scotland's current urban policy focuses more on the interconnections between Scotland's cities - and the Clark paper does emphasise the importance of the connections between cities. But it also reinforces the role of City Deals as joined up government investments in the effectiveness of individual cities, something about which current Scottish policy has less to say.
But if you do follow the policies supported in the Clark paper and you devolve powers and resources to a true city region, is Glasgow too big for Scotland to handle? Adding up the population of the Greater Glasgow and Clyde Valley city region on a narrow definition focusing on a continuous built-up area you will reach 25% of the Scottish population. Take in a wider definition that covers the eight authorities of the Glasgow City Region, then you have over 33%. Even Buenos Aires is not as dominant as that. Certainly at the Chamber we hope Scotland can find its way to support Glasgow in its negotiation of a City Deal for the city region. Scotland's biggest city is re-emerging as the centre of engineering design and manufacture that we all want it to be. City Deal can give that recovery a real shot in the arm.
