Drug crime casts a shadow

A BREAK in the rain clouds over Manchester as a British Airways shuttle begins its descent reveals a city skyline that would be barely recognisable to the old Mancunian industrialists who made their wealth there. New office blocks encircled by swinging cranes finger their way upwards, dwarfing the solid, Victorian buildings that once dominated the city.

On the surface, the two centuries are linked by an emphasis on prosperity. But a new report by Ereco, a group of European think-tanks, suggests that the city's growth is being hampered by a very 20th century problem: drug- related crime.

"Profits from organised crime have encouraged the development of a large black economy, while hindering the growth of the legitimate small-firm sector," according to the report published last week. Skilled jobs in manufacturing are being lost forever, it adds: "Unfortunately, where employment growth has occurred, it has been in the lower-value-added parts of the service sector." Summing up, the report predicts that mighty Manchester will grow more slowly than Cardiff, a relative minnow as conurbations go.

Such criticisms are not welcome in Manchester. Mancunians do not recognise the bleak city painted in the Ereco report.

They do not agree that the city's obvious optimism "obscures the acute social problems" it faces. Neither is it a place, they say, where organised crime is rampant.

"What we don't need is negativity and the constant knocking of this city and region," said Geoff Muirhead, the airport's chief executive. "We are actually creating a great many jobs. But people don't like to celebrate success here, do they?"

Mr Muirhead is adamant that a new runway, if approved, will provide growth to the year 2005 that the airport - and thereby Greater Manchester - can capitalise on. About 30 million passengers a year will be using the airport, compared with 14.5million now.

Graham Stringer, leader of the city council, says that much of the report is "factually wrong". He disputes the criteria used and says that while the city has "serious social problems" a great deal is being done to tackle them within the economic structure. Companies wanting to expand are being persuaded to recruit people locally. And they are expanding, he said.

The city is benefiting from a buoyant financial and professional services market. Around 112,000 jobs are dependent upon the insurance, banking, business services and the financial sector. Touche Ross, the accountancy firm, has signed up 40,000 square feet of office space near the city's commercial spine in Deansgate. Alan Watson, the Bank of England's agent in the city, said that when he came to Manchester 10 years ago there was a lack of confidence, which had now disappeared.

The old manufacturing industries have had a difficult time throughout the recession, but investment is being ploughed into the city. Its unsuccessful bid for the Olympic Games (soon to be followed, it is hoped, by an announcement that Manchester will stage the Commonwealth Games) did at least produce an injection of new money and projects worth almost pounds 450m. There is also the pounds 200m regeneration of the Hulme residential area.

Many of these points were also made in the Ereco report. It is not that Manchester is declining in the short term - its 2.2 per cent annual growth rate is below the UK average, but still respectable. And in the long run, Manchester's airport and well-respected higher education institutions could power the city into a new phase of growth, it concedes: "A new specialism in international business consultancy and newer business services appears to be developing in and around the city region."

But there are still many disadvantaged people in the city. Although the overall figures are falling, crime remains cause for concern. What the developers, the financiers and the politicians must hope is that even a gradual upturn in the city's economic fortunes will eventually help to clear the rain clouds over the poor. If not, the darkest vision hinted at in the Ereco report might come true.