Home
July 06, 2009 Est 1999 Scotland's award-winning independent newspaper
Why Glasburgh would be miles better

IF YOU think that the best thing in Edinburgh is the train back to Glasgow or that all civilised life endssomewhereabout Corstorphine, then this column is really not for you.

Timewaswhensuchattitudes wereprevalent,includingamong those who professed to lead the two cities: they may well have been in the samepoliticalparty,but when it came to cities, their attitudes could not have been more divisive.

Now, whisper it softly, there are still some among the senior councillors in both cities who maintain that opinion,but those views are not shared by the two city leaders and their political allies.

The other group who seemed to maintain such attitudes were those in the professions. The lawyers and accountantsmayhavegoneto Heriot's or Hutchie but they clashed on the rugby field with each other and unfortunately the rivalry did not end there.

Now, there are signs too that attitudes among these groups are changing (please tell me I am not being absurdly naïve on this last point).

Aconferenceoncollaboration, held under the auspices of the twin cities project last Friday, drew a swift positive response and seems to have been a well-received session.

It seems that work on getting the two cities to collaborate - a project beingco-ordinatedby"inter-city tsar" Laura Gordon - is pushing at an open door .

The rationale for greater co-operation was set out in a paper presented totheconferencebyChristoph Koellreuter of BAK Basel Economics - an economic consultancy which has already done valuable work for both of the cities. The thrust of this latest research is that both cities and theirsurrounding areas have much to gain fromcollaboratingiftheyareto compete on the wider stage.

The research showed how much theroughestdownturnsofthe economic cycle could be evened out if the two cities worked more closely together. In other words, the differing concentrations in the differing sectors means that Glasgow and Edinburgh and their surrounding areas are not at the same place economically.

Koellreuter argues that the areas in whichthetwocitiesarestrong complement each other. Edinburghisstrongintourism,hotelsand restaurants,bankingandother financialservicesandwhatBAK Basel describes as advanced manufacturing: life sciences and chemicals.

Glasgow, on the other hand, is a consumer city with its strengths in retail, in entertainment, in culture andsport,andshouldcontinue developingintheseareas. In the wholesale trade and more "traditional" industries, Koellreuter says thatGlasgowisdoing comparativelywellintraditional manufacturing.

He argues that a welcome byproductofgreatercollaborationis producing a more balanced economy with fewer risks and less exposure to business cycles.

The two areas combined have an employees base of 600,000, rather than slightly below 300,000 in each. Therearethreeuniversitieswell ranked in the international index.

With the economics of scale and scopethatEdinburghand Glasgow and their two surrounding metropolitan regions give, the two cities collaboratingreallycanmakean impact on the world stage.

Are you still doubtful? Consider the fact that Glasgow and Edinburgh and their environs contain 63% of the Scottishpopulationand67%of ScottishGDP.And thenlookatthis number;GlasgowandEdinburgh together contribute a stunning 80% of the growth Scottish GDP.

These are powerful numbers, but to really make them work for Scotland, to build on this to make the areatrulytheeconomicpowerhouseof Scotland, transport links betweenandwithinthetwowillhave to be improved.

BAK Basel is calling for a high-speed train to between the two cities and an improved"masstransitsystem" throughout the whole joint region.

Gordon has met with the rail players who are looking at the feasibility of improving the links including putting on trains later at night.

There is much that can be done here, although I fear that BAK Basel's suggestion of a jointinternational airport between the two cities is a bird that will not fly.

ChristophKoellreutersaysthat with significant will and investment a strongerurbanScotlandhasthe potential to make Scotland the "next small state success story".

To achieve this, he suggests that Glasgow-Edinburgh has to choose from one of two "recipes for success. These are the Nordic success model and the Anglo-Celtic success model.

Nordic success, he says , is based on a high spend on research and development (R&D) and an efficient system from getting research from education to market, low product market regulation, low company tax, a relatively restrictive labour market and high personal tax.

The Anglo-Celtic model emphasises top universities, low spend on R&D, very light product and labour market regulation and low personal tax.

Interestingly, Koellreuter argues thatlow personal tax is a much greater driver of economic growth than lowcorporation tax.

So a devolved Scotland has that lever in it hands right now and does not need independence andthelowcorporationtax,àla Dublin model, so much argued for by the SNP. Will we see a political party arguing for a cut of 3p - the maximum possible under the current devolved settlement - in the rate of income tax at this upcoming Holyrood election in May? No I thought not.

Much food for thought. Let me end bysayingthatifyouhavethe attitudes portrayed at the start of this piece and you have got this far then I take it back - this column is very much for you.

Share this story on: Digg | del.icio.us | Furl | reddit | NowPublic | Yahoo!