Scotland would be a lot stronger without economic impact of Brexit
Edinburgh’s economy has reached a historic milestone. For the first time, the capital’s GDP per head has overtaken London’s with output per person now sitting at £69,809 compared with London’s £69,077.
A generation ago, Edinburgh was 19 per cent behind. The reversal is not just remarkable in statistical terms but speaks to long-term structural shifts in the balance of economic power within the UK. The growth has not come out of nowhere. Edinburgh has built up its reputation as a centre of financial services, data innovation and higher education. These sectors have attracted global firms, skilled workers and sustained investment. Recent figures show that Scotland as a whole has increased its share of all UK foreign direct investment (FDI) projects to 15.8 per cent. This is the highest proportion in over a decade. The number of financial services projects in Scotland reached a 10-year high with Edinburgh playing a key role.
Across the UK the picture looks different. While Scotland’s FDI numbers are increasing, the total number of projects in the UK fell by 12 per cent last year. Business confidence remains shaky, especially in sectors like manufacturing, energy and logistics. Global investors cite political instability and post-Brexit uncertainty as major deterrents. London experienced a 15 per cent fall in new investment projects. This should give the UK Government much food for thought about what does and doesn’t work for balancing economic power and investment across the country.
Scotland has shown resilience. For the past ten years, it has ranked as the most attractive UK location for inward investment outside London. That consistency is not accidental. It has been supported by coordination between the government, local authorities, national agencies and universities, especially in Edinburgh and Glasgow. Having seen their work first hand, Scottish Enterprise, Scottish Development International, and our economic and international-focussed public servants deserve great credit for the country’s success. Scotland’s financial and business leaders continue to secure our place at global industry top-tables.
The Scottish Government’s approach to key industries like clean energy, digital infrastructure and fintech has focused on attracting high-quality jobs and future-proofed investment. In Edinburgh, that strategy has yielded visible results. Long-established banks and insurers continue to invest, while emerging firms in green finance and software development are choosing the city as their base. Major institutions, from universities to cultural venues, help reinforce the city’s appeal to talent. Combined with infrastructure upgrades and a commitment to climate-friendly development, this creates the kind of environment global investors look for.
Despite this success, the wider economic reality for many people is still extremely difficult. Wages are under pressure. Public services are stretched. Core costs like housing, energy and food continue to rise. Against this backdrop, it is vital to be clear about what is holding Scotland back. The decision to leave the European Union has had a lasting and measurable economic impact. The Office for Budget Responsibility estimates that Brexit has permanently reduced UK GDP by 4 per cent. The Centre for European Reform estimates that business investment is 19 per cent lower than it would have been. Exports are weaker, inflation higher and key sectors have lost access to vital labour markets. Scotland did not vote for this path. Edinburgh’s strong performance shows what is possible – but there is no doubt we would be in a stronger, fairer and more prosperous position today had Brexit not been forced upon us.
Angus Robertson is SNP MSP for Edinburgh Central and Constitution, External Affairs and Culture Secretary