Edinburgh contributes more to economy than London

According to a new report Scotland’s capital contributes more to the country’s economy than any other city in the UK. The study was released by London based accountancy firm UHY Hacker Young. Their calculations are based on Gross Value Added (GVA). It basically means the measure of a region’s contribution to the UK economy according to the value of the goods and services it provides. Figures show the city had a GVA of £34,950 for 2009. This figure places it ahead of London, where the GVA fell from £34,964 to £34,779. A reason for it is that the crisis had a negative impact on the capital’s financial sectors with a lot of jobs getting cut, as well as a lot of poor neighborhoods around the city.

Traditionally, London’s GVA has been considerably higher than the other major UK cities but recently it has suffered due to the economic crisis. Unemployment has had a significant bearing on the GVA contributon: the unemployment rate in the capital stood at 9.1 per cent, compared to Edinburgh’s rate of 6.3 per cent.

But Edinburgh is not the only Scottish city which performed well in the report, Glasgow and Aberdeen were also ranked in the top 5 cities in the GVA league table. Aberdeen in particular, with its sizable oil and gas industry is an important contributor to the UK’s overall economy. And the Northern city has been largely unaffected by the financial crisis and continued to show stable performance in the report.

Marc Waterman, a partner for UHY Hacker young explained: “The situation in Aberdeen is unique within the UK. It’s the only major city in the UK that has an economy based almost entirely around the oil and gas industry.” The demand for Aberdeen’s oil internationally means a positive impact on Britain’s overall economy.

The strong performance from Scottish cities should be received with some semblance of caution, since the analysis does not always include all relevant factors. But nevertheless the report should provide a boost in confidence for 2014, when Scotland will vote on independence.