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Reaching the Top: The UK and the G7 Big Cities

Reaching the Top: The UK and the G7 Big Cities

 


A common benchmark for the UK economy is how it performs compared to other G7 countries. Despite this, little is known about how the cities of the G7 measure up and how this affects the performance of the seven economies.

This report is the first to do so. This shows that the prosperity gap that exists between the UK and the G7 top performers of the US, France and Germany is a result of the underperformance of UK secondary cities. Seven of the G7's bottom 20 most productive cities are UK cities, which has implications for the UK's overall performance.

Figure 1: In the most productive countries, large cities are more productive.

Large cities should have an advantage because of the advantages they offer: access to a rich pool of skilled workers and access to networks of other high-skilled businesses. UK cities inherently do not provide these benefits as much as they should, and addressing this should be a key part of the next government's economic policy.

Bridging the gap between the UK and other major economies is no small task. For Britain to become more prosperous than Germany, which is the task of the next government, the national economy would need to be $181 billion (at 2018 prices), or 8.8% larger. It's hard to believe that this gap will close without cities like Birmingham, Glasgow and Manchester playing a much bigger role. To achieve the same level of performance as similar G7 cities, they would need to contribute 57% of the total GDP increase of 181 billion.

Achieving such goals will require a long-term strategy backed by sufficient funding and reforms to meet the scale of the challenge. To begin this task, the next government will need to: (along with a number of national policy changes that are space-agnostic, such as policies to encourage business investment and the UK's trade relations with Europe, which are beyond the scope of this report).

Reform the planning system to move the UK away from a uniquely discretionary system and towards a rules-based system that is more common in other G7 countries. Pursue deeper devolution to bring the UK's largest cities more in line with their G7 peers. That means more control over spending, the ability to raise its own taxes and ensuring London has transport powers similar to Transport for London. A UK version designed to spur cutting-edge activity in the UK's largest cities, spending $15.9 billion over 10 years in Birmingham, Glasgow, Manchester and Leeds to encourage innovation through leading universities, invest in city centers and expand city centres. This is the US CHIPS Act. Their transportation funds. Most of these funds had already been allocated by the previous government but were not used.

Sources

1/ https://Google.com/

2/ https://www.centreforcities.org/publication/climbing-the-summit/

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