My Lords, in the past decade we have seen for the first time more than half the world's population living in cities and city regions. In the United Kingdom, 74 per cent of the population lives in cities and their regions. Therefore we are more urbanised than most. That figure is forecast to rise to more than 90 per cent by 2030.
As my noble friend said, cities are the engines of national economies but it is important that we take note that not all our cities are automatically winners. A recent paper by the Institute for Government and Centre for Cities has an interesting analysis. It contrasts Brighton, which saw a 25 per cent increase in private sector jobs between 1998 and 2008, with Stoke, which was once at the centre of our international pottery industry and has lost getting on for one in five private sector jobs in that same decade. That is why I strongly recommend and welcome the Government's document, Unlocking Growth in Cities. The picture is not one of even growth and a great deal must be done. Along with Stoke, the other losers in that analysis are Burnley, Birkenhead, Gloucester, Blackburn, Oxford, Birmingham, Nottingham, Swindon and Blackpool. I should like noble Lords to note that these cities are not all in the Midlands and the north of England. In the past decade, for every 10 jobs created in London and the south-east, just one was created elsewhere, which is why our economy desperately needs rebalancing.
Cities compete all the time with each other for talent, investment and funding. That competitiveness is encouraged by even artificial constructs and devices, such as the city of culture. I well remember that my own city of Cardiff lost out to Liverpool, the city of my noble friend Lord Storey, in the city of culture competition a decade or so ago. Although we were really sorry not to have won and although we envied Liverpool its year of culture, we benefited from that competition. It stimulated cultural ideas and cultural planning in Cardiff. We have, for example, the Artes Mundi competition. It is a modern art competition of world status and was established when we were hoping that we might win the city of culture competition.
I make no apologies for drawing on examples from Cardiff. I know that it is not on the magic list of the eight core cities that have been referred to but we are a city of considerable significance. Although Cardiff is a minnow in terms of size compared with Liverpool, Manchester and Birmingham, it is a city of considerable strategic importance because it is the capital city of a small nation.
Looking across the cities of Britain, historically, each of them has a reason for being-a geographical reason, a reason of climate or of raw materials. Manchester, for example, exists because of its climate and the cotton industry. Stoke exists for the potteries. My own city, Cardiff, exists because it was a port and because of the proximity to that port of mines, the iron industry and, later, the steel industry. It was at one point the greatest port in the world. It is an interesting piece of local history that the first £1 million cheque in the world was signed in the Coal Exchange in Cardiff. The port still remains, of course, but is a shadow of its former self, so, like other cities, Cardiff has had to find a modern reason for being. Like other cities, it relies on being a thriving retail centre. In 2009, the largest new shopping centre in the UK was opened there, bringing, at a very difficult time for the economy, more than 400 new jobs. Cardiff now ranks among the top 10 retail cities in the UK. However, you have to have more than shopping and retail, so the city council has important plans for a central business district and has already indentified £40 million of capital finding to take that project forward. Rather belatedly, I am very pleased that the Welsh Assembly Government opted to follow the example of the UK Government by establishing a series of enterprise zones. One has been earmarked for Cardiff, specialising in the financial sector.
I put in an unashamed plug to the Minister. Cardiff would be an ideal location for the green investment bank, especially because of the promised electrification of the train service through to Cardiff, and the almost promised electrification of the valley lines. The central business district will create, as well as a lot of jobs in an important financial sector, a new bus station and will improve the train station. I am talking about transport because transport links are the key to the development of city regions. City regions are the way forward, because they spin out jobs to the rest of the economy in the area around the city.
While many of our great cities can be recognised as city regions, the idea has been resisted in south Wales until now. There has almost been a resentment of the growth of Cardiff. Therefore, I strongly welcome the fact that there is currently a Welsh Government consultation on Cardiff as a city region. It is so important that it is recognised that the future prosperity that we all hope the south Wales valleys will have depends on Cardiff, Newport and Swansea flourishing as cities, because they provide jobs for that region.
City regions can be seen as a sign of co-operation between urban areas rather than competition. The region of Leeds, which I do not think anyone has specifically mentioned so far today, includes Bradford, Kirklees, Barnsley, Wakefield, York, Harrogate and more. It is a massive conurbation which requires a great deal of co-operation across local authority boundaries. It is absolutely essential that that co-operation takes place. It has to be the way forward, because outright competition on all fronts often simply means shifting the jobs around from one area to another. The current crisis in the retail sector might be partly due to the fact that we have decided to shop online instead of in the city centres. It is also partly due to the difficult economic times that we are in. However, it pinpoints that you cannot have a city based entirely on the fact that it has a nice shopping centre. The shoppers move, and the jobs move, to the newest shopping centre which has opened. You always lose shoppers and jobs when a new shopping centre opens within your area.
We have to be careful about initiatives which might move jobs from one area to another. I think back to the 1980s and the enterprise zones. Analysis since then has shown that, to a large extent, they moved jobs around the country. Although I strongly welcome the enterprise zones that the Government have now introduced, I am pleased to see that there are measures to prevent that happening this time.
The Government's strategy starts with the eight core cities, our largest. As my noble friend said, there will be, we hope, a second tranche. Of the eight that have been announced so far, I note that only one of them, Bristol, is not in the Midlands or the north. That is understandable, but it is important that the balance is redressed in the future. Otherwise there is a danger that the south-west will be excluded from growth because of the empowerment and funding that is going into those eight core cities. I realise, of course, that the core cities have chosen themselves on the basis of size, but a strategic look at the geographical spread of the cities in the second tranche is needed.
My noble friend Lord Shipley has referred to the fact that devolution inevitably means that there is a separate treatment of the cities in the devolved nations. None of the Welsh cities that I referred to earlier is included. That is because of devolution. It is thus important that the two Governments work closely together. To return to Cardiff, there are already concerns that although the UK government initiatives such as enterprise zones, tax increment financing and local enterprise partnerships are being copied in Wales, they are being copied at a slower pace. In the economy, there is often no prize for second place. There is nothing if you have done a very good job but have not managed to be the best. Indeed, Wales has already lost one major development to an enterprise zone in England: the Jaguar Land Rover engine plant. Plans have been announced to establish it in an enterprise zone in Wolverhampton. The hope that it would be located in south Wales was unfulfilled.
Whatever the political differences, it is essential that economic policy in all devolved Administrations works with the grain of the UK's Government's macroeconomic policy. Otherwise, the cities of Scotland, Wales and Northern Ireland risk falling into the gap between the two Governments and the two sets of regulations. I am particularly attracted by the "tailored city deals", as the Government's strategy refers to them, empowering the leadership of our great cities. For many decades, we have had the drift of power to the centre, away from local government. Indeed, the term "local government" really does not reflect the reality of city regions such as Manchester, with a population of 2.6 million people. That is almost as large as the whole population of Wales and larger than the population of Northern Ireland. It is vital that we think globally. The competitors to our major cities lie not just in other parts of the UK but across the world. That global success is the envy of the UK economic success as a whole. We need to do comparatively better than other global cities if we are to succeed internationally. We are not, as my noble friend explained, doing as well at the moment as they are in many European cities.
I very much support the power of general competence given to local authorities in the Localism Bill and the proposed business rates retention that will enable local authorities to create tax increment financing schemes and allow borrowing for capital investment. I support financial empowerment. It is so important that cities are enabled to look towards the private sector to energise and empower them, rather than, as they have been doing for decades in the past, looking upwards to government for a handout in difficult times. Our cities are the strength of our economy and they need to be empowered in order to fulfil that.