Further proof that Edinburgh and Glasgow are Scotland’s economic powerhouse - Donald Anderson
New income-tax figures highlighted by investor and leading independent financial adviser Craig Pollard provide another striking illustration of the economic importance of Edinburgh and Glasgow – not only to their own residents, but to the whole of Scotland.
Pollard’s analysis of HMRC data shows that Edinburgh residents incurred an estimated £2.84 billion in income-tax liabilities in 2023–24, while Glasgow residents contributed £1.58bn.
Together, the two cities generated £4.42bn – more than three-and-a-half times the £1.26bn attributed to Manchester residents. Edinburgh alone generated £1.58bn more than Manchester, while Glasgow contributed around £320 million more.
Edinburgh’s performance is particularly remarkable. Its residents generated more income tax than those of Birmingham, Leeds, Bristol or Manchester. Among the major cities outside London included in Pollard’s comparison, Edinburgh was comfortably the largest contributor.
That reflects the Capital’s strengths in financial services, technology, tourism, universities, government, life sciences and the creative industries. These sectors support highly productive and well-paid employment, attract international investment and generate revenues which help fund public services throughout Scotland.
Glasgow’s £1.58bn contribution is also hugely significant. It placed the city ahead of Manchester, Sheffield, Liverpool, Cardiff, Belfast and Newcastle. That challenges the outdated portrayal by some of Glasgow as an economic failure. It remains one of Britain’s most important centres for business services, advanced manufacturing, engineering, higher education, culture and the visitor economy.
The tax figures reinforce the findings of research I highlighted a couple of weeks ago in this column. That analysis found that the Edinburgh and Glasgow city regions generated around 86 per cent of the entire increase in Scotland’s real economic output between 2007 and 2023.
Of Scotland’s £23.5bn increase in real GVA over that period, the Edinburgh city region contributed approximately £11.2bn, or 47.5 per cent, while the Glasgow city region added £9bn, or 38.3 per cent. Together, they accounted for 85.8 per cent of Scotland’s growth. The rest of the country contributed the remaining 14.2 per cent.
The tax and growth figures measure different things. Pollard’s figures concern the income-tax liabilities of residents within city council boundaries, while the 86 per cent calculation covers the wider functional city regions. Scottish income-tax rates also differ from those in England.
Nevertheless, both sets of figures point in the same direction: Edinburgh and Glasgow are the principal engines of Scotland’s economy.
They also provide powerful support for the concept of Scotland’s Growth Corridor, which former Glasgow Council leader Steven Purcell and I originally launched.
The corridor stretching between the Edinburgh and Glasgow city regions contains Scotland’s greatest concentration of population, businesses, universities, skilled workers, research capacity and transport connections. The two cities should not be presented or developed as direct rivals. Our great city’s strengths are different but complementary.
Edinburgh contributes its global financial centre, technology sector and international profile. Glasgow brings its larger metropolitan labour market, industrial capability, cultural strength and world-class universities. Better transport, housing, digital connections and coordinated investment could make their combined economic impact greater still. Backing Scotland’s Growth Corridor is not special pleading for two cities. The evidence shows that their success generates employment, economic growth and tax revenues that support public services and communities across Scotland.
When Edinburgh and Glasgow prosper, the whole nation of Scotland benefits.