By Andrew Bounds, Financial Times
Liverpool faces “exactly the same situation” as it did under a previous Conservative government in 1981, the Labour leader of the city council said after cabinet papers from the time were revealed, condemning the Tories as “no friend of our city”. “There is a feeling of déjà vu in Liverpool because three decades on we are facing exactly the same situation as we did in the early 1980s - huge cuts in public spending which disproportionately hit big northern cities, while Conservative heartlands in the south get off relatively unscathed,” said Joe Anderson.
“Then, as now, the Tory party ideology was to let the strong survive and the weak wither away,” he said, excluding Lord Heseltine, the self-styled “minister for Merseyside”. However, he said the city was a “much stronger and much more confident place” and better able to handle the cuts. More than £4bn of public and private investment has poured into the city since the millennium, including £929m of European money alone between 2000 and 2008.
Its docks, once the source of its wealth and the trigger for its decline as trade switched from the Commonwealth to the European Union, are expanding again with a £200m investment programme to equip them to take the biggest modern ships. Owner Peel Holdings is seeking to turn the area into a logistics hub. Its economy grew 5.5 per cent on average annually between 1998-2008, the fastest of any city outside London. The £1bn Liverpool One shopping and leisure centre near the waterfront has transformed it into a top five shopping destination. The £5.5bn Liverpool Waters scheme would see a huge business district built on the northern docklands.
However, the city remains vulnerable. Some 36 per cent of its workers are in the public sector, which created much of the jobs growth of the “noughties”, against the national average of 26.9 per cent. Almost a quarter of the population receive benefits. They are expected to lose £148m annually after government welfare cuts, almost 1 per cent of the city’s annual economic output, according to the Centre for Cities think-tank. That is the largest proportion of any British city and equates to a loss of £192 per head, compared with £125 in Bristol. The unemployment rate remains 6.3 per cent, the fourth highest in the country.
In the 1970s, 100,000 people, one-sixth of its population, deserted the city. The population declined further from 510,000 in 1981 to 452,000 in 1991, before stabilising at 440,000 in the last few years. However, Tony Caldeira, a businessman and chairman of the Conservative party in the city, said the 1981 cabinet had been wrong. “You have only got to look around to see Liverpool has been transformed. Back in the 1980s people may have written Liverpool off. That is not the case in 2012.
“We have railway electrification, the new Mersey crossing, a new Royal hospital and possibly Alder Hey too. There is a lot of investment going in.” He said Francis Maude recently visited the city and was considering it for a future party conference. “The party is committed to Liverpool. There is an entrepreneurial spirit here that will pull us through.”
In March the city is hosting the Kauffman foundation’s Global Entrepreneurship Congress, the first time it has come to Europe.