How Manchester Turned Its Economy Around

From Gunchester to growth, from bombing to Burnham

Hello there! 😀

I grew up in a suburb of Stockport and when I was younger, Stockport town centre was, to put it politely, ‘angin. It could have been described using a lot of words beginning with f and s, but “fashionable” and “sought-after” weren’t among them.

This is no longer true. The wider transformation of parts of Greater Manchester in my lifetime has been massive. Stockport is now regularly described (mostly ironically but sometimes unironically) as “the new Berlin.” I know someone not from Greater Manchester who was interested in moving to Edgeley because it had nice coffee shops. Manchester city centre, which once emptied after office hours on weekdays, is now packed with flats, bars, students, cranes, hotels and people who voluntarily pay £8 for a pint. It’s even pretty difficult to get Stockport County tickets these days too.

These are the sorts of sentences that would have sounded like jokes when I was growing up. As Jack Peacock pointed out recently, Stockport finished 12th in the original 2003 Crap Towns, but The Sunday Times named it the best place to live in the North West in 2024.¹ There’s no Gail’s Bakery in Stockport town centre yet, but give it time.

• Why did Greater Manchester recover when so many other post-industrial cities struggled?

• Why did Greater Manchester manage to build institutions that function while the wider British state looks incapable of organising a piss-up in a Boddingtons brewery?

• Why did a Labour council become the most aggressively pro-growth, pro-development, pro-FDI political machine in the country?

• And how much credit should go to Andy Burnham?

Greater Manchester’s success is real, but none of it happened by accident. This is my attempt to explain the economic turnaround and what it might tell us about our potential future Dear Leader’s premiership.

Alternatively, if Andy Burnham loses the Makerfield by-election, this article may survive as a strange historical artefact from that brief period when the British political class became extremely interested in Manchester before forgetting about it again.

When the streets are cold and lonely

The City of Manchester’s population fell from 766,311 in 1931 to 392,819 by 2001.² By the end of the 1970s, Manchester and the surrounding towns were losing 121 manufacturing jobs every working day.³ Within the actual city centre, the resident population (now close to 100,000) was only around 500 in 1990.⁴ During this time, the city was also being called “Gunchester” because of gang violence.⁵

This was frustrating, because Greater Manchester clearly had huge potential. It had a strategic location, a large labour market of millions of people within commuting distance, an international airport, serious universities, civic pride, major influence on popular culture, and a name known around the world because of its football team (singular 😏).

This was not an issue only faced by Manchester, at the time. Throughout Britain, the old manufacturing base was dying and nothing substantial was replacing it. Manchester had bits of services and plenty of public sector employment, but so did similar cities like Leeds or Birmingham. The turnaround needed something more and something unique.

I can feel the earth begin to move

During the 1980s, Labour councils in big cities were dealing with Thatcherism in different ways. The most (in)famous Labour council – a Labour council! – was Liverpool’s. Here, the Trotskyist group Militant tendency came to dominate Liverpool City Council with impossible promises, far-fetched resolutions and rigid dogma. This all culminated in the council playing politics with people’s jobs and services by setting an illegal budget in 1985.⁶

Manchester Council’s Labour leadership moved in an entirely different direction. The city still wanted jobs, housing and public investment, but realised that permanent ideological warfare with Westminster would deliver none of it. Graham Stringer led Manchester City Council from 1984 to 1996 and acknowledged that the city needed the private sector to create jobs. This marked Manchester’s first tentative steps towards working more closely with developers and central government to get investment and jobs back into the city.⁷

At this point, the two most important people in the story enter the picture: Richard Leese and Howard Bernstein.

Richard Leese (left) and Howard Bernstein (right)

Richard Leese was elected to Manchester City Council in 1984, became deputy leader in 1990, and was leader of the council for 25 years (!!!) from 1996 to 2021, as well as being Deputy Mayor of Greater Manchester from 2017 to 2021. He was the political anchor of modern Manchester’s economic turnaround, providing continuity, backing a long-term strategy and holding the line when individual projects went wrong.⁸

Howard Bernstein joined Manchester town hall straight from school in 1971 as a junior clerk and stayed for nearly half a century, rising to become chief executive of Manchester City Council for 19 years (!!!) from 1998 to 2017. Two early experiences were important in informing Bernstein’s later approach. The first was the 1986 creation of Manchester Airport plc under local-authority ownership by Greater Manchester’s ten councils, an early act of city-region coordination that Bernstein helped drive. The second was the early 1990s rebuilding of Hulme Crescents, backed by Michael Heseltine, which became one of the best-known regeneration schemes in Britain. By the end, he was a master at knowing how Whitehall worked, how to use masterplanning, how to get deals done, when to charm, when to cajole, when to tell people to get out of the way, and generaly how to turn failing things around.⁹

One weakness of British local (and national) government is churn, where personnel and strategies are constantly changing. Manchester got the opposite. The political side and the officer side were aligned for long enough to build trust with business, with government and with each other.

How could it ever come to pass?

Three major developments in the late 20th century showed that the city was already trying to think bigger. First was the city’s tram network. Manchester had actually possessed one of Britain’s largest tram systems in Victorian times. Like many British cities, though, it ripped most of it out after WWII. That decision meant congestion worsened, cross-city rail connections remained terrible, and the city’s two main stations (Piccadilly and Victoria) still sat awkwardly at opposite ends of the centre.¹⁰

Manchester spent decades producing increasingly desperate ideas to fix this. Underground tunnels, monorails,¹¹ suspended railways, and at one point something called “Project Gondola” were all proposed.¹²

Finally, in the early 1980s, Greater Manchester’s transport authorities and British Rail settled on a modern light-rail tram system running both on converted rail lines and through the city streets themselves. The Conservative government approved the scheme and Metrolink began operating in 1992 with two initial lines connecting Bury and Altrincham.¹³

After that, Bernstein and Leese expanded it aggressively. Over the following decades, Metrolink grew into a 64-mile network with almost 100 stops. Transport historian Paul Williams argues the system repeatedly proved its wider value:

“Metrolink is very, very expensive to build. But if you spend the money wisely it’s been proven, time and time again, that Metrolink moves people from their cars onto the tram. It also creates more journeys, which might sound like a bad thing, but what I mean by that is we have people who feel isolated or lonely, they’re not able to get to the shops for instance. For them the option doesn’t tend to be car, or bus or tram. It’s more likely to be tram or not travel at all.”¹⁴

It helped knit Greater Manchester together into something closer to a single functioning urban economy. By 2019-20, more than 44 million journeys a year were being made.¹⁵

Second was the bid for the 2002 Commonwealth Games, which Manchester won in 1995. The council were clear from the start that this was not going to be treated as a two-week jamboree, but would be used as a means to drive long-term regeneration. A Manchester City Council memo in 1999 set out a number of its strategic goals for the games:¹⁶

1. The Games as a regeneration project: The Games were tied directly to the regeneration of east Manchester, one of the most deprived areas in the region.

2. Build lasting infrastructure instead of temporary “event-only” venues: The key example of this was that the main stadium would be converted into a permanent football venue for Manchester City.

3. Create broad political support: They repeatedly framed the Games as “England’s Games” and a “national undertaking,” not merely a local project. The bid, therefore, secured backing from John Major’s Conservative government, Tony Blair’s Labour opposition, and national sports institutions.

4. Build partnerships: Relatedly, the memo emphasises collaboration between local government, national government, sports councils, universities, business groups, regional agencies, arts organisations and private sponsors.

5. Strengthen civic identity and international image: The games were aimed at creating civic pride in the region for residents, as well as improving Manchester’s international reputation with an eye on future international investment and World Cup and Olympic bids.

The other was the Trafford Centre, which was first dreamt up in the mid-1980s. Trafford Council backed the scheme, but other Greater Manchester authorities were sceptical. What followed was the usual British obstacle course of objections, legal challenges and transport wrangling. Planning permission was first granted in 1988, but transport concerns slowed the process. Full permission came in 1993, followed by a High Court challenge and then a House of Lords battle. The scheme was finally approved in 1995 and building began in May 1996. It took 27 months to build and cost about £600 million, far above the original budget.¹⁷

For Manchester’s leaders, the lesson was that…

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