Fighting to end the cold war in the North-west

For those Liverpudlians who have still not forgiven Manchester for building the Ship Canal, which bypassed their ocean-going trade in the 1890s, yesterday was one of forced reconciliation.

For those Liverpudlians who have still not forgiven Manchester for building the Ship Canal, which bypassed their ocean-going trade in the 1890s, yesterday was one of forced reconciliation.

The cities were united like never before in a new economic strategy for the north-west of England. Under a "twin city" vision, the new north-west brotherhood should mean no more scrapping for grant money, with the two cities taking account of each other in their pursuit of tourists and inward investment.

The strategy was devised by the North West Development Agency (NWDA), one of eight agencies set up to boost competitiveness in the North-west. Each delivered a 20-year plan to the Deputy Prime Minister, John Prescott.

The NWDA, which also covers Cumbria in a region of 5,500 square miles stretching from Crewe to Carlisle, has £25.8m to spend on helping the area over the next four years.

Quite how often conflicts of interest will occur is anyone's guess. As if to prove this point, Liverpool airport was yesterday on the defensive after hearing that its dominance of the region's budget airline market was under attack from Manchester, where the Irish operator Ryanair will offer £5 return flights to Dublin. Manchester is also in discussions with British Airways' budget operator, Go.

Liverpool airport said it would consider "all courses of action" to meet the threat from 40 miles up the M62.

The divide is even more evident on the football terraces. Liverpool, the dominant force in the 1980s, has long since been superseded by Manchester United and few sets of supporters express more intense mutual dislike.

But Mike Doyle, NWDA deputy chairman and a Liverpudlian who supports the city's other team, Everton, insisted there were too many challenges to let local rivalries cloud the future. The North-west, he said, had 25 per cent of England's derelict land and 15 of the UK's 50 most deprived areas while West Cumbria faced the same poverty as parts of Liverpool because its areas of deprivation were cripplingly remote.

Sustainable industry is another challenge in a region where manufacturing accounts for 23 per cent of gross domestic product, compared with a national average of 18 per cent.

The NWDA chief executive, Mike Brooks, who unveiled the strategy at the tactfully neutral venue of St Helens, revealed that money is likely to be allocated for a marketing campaign to improve the Northwest's image.

Mr Brooks, who hails from the North-east, admits puzzlement at the Liverpool/ Manchester cold war. "Five years ago the cities weren't even talking," he said. "But when it comes to securing inward investment, the two are rarely in direct competition. It is a global market and investors are looking at the labour force and infrastructure and we must make the North-west as attractive for them as possible."

Civic leaders at both ends of the M62 would agree.

A tale of two cities

MANCHESTER

Population: 427,700

Unemployment: 5.6 per cent

Defining landmarks: Grade I listed Victorian gothic-style town hall, Bridgewater Hall international concert venue

Boasts: Spectacular rebirth of city centre after 1996 IRA bomb; Metrolink public transport system carries 14 million passengers a year, of whom 20 per cent previously travelled by car; Manchester airport will be UK's second biggest when its £172m second runway is built next year; city is hosting the 2002 Commonwealth Games

Challenges: Easing deprivation in East Manchester is a North West Development Agency priority; getting loss-making Halle Orchestra back on financial footing

LIVERPOOL

Population: 463,700

Unemployment: 9.2 per cent

Defining landmarks: Liver Building, Anglican and Catholic cathedrals (the only city in the UK to boast two), St George's Hall

Boasts: The revitalised Ford Halewood plant's contract to build the new Jaguar X400 in burgeoning Speke Garston area, where 1,500 mainly pharmaceutical, automotive and call centre jobs have been created. Mersey Docks & Harbour Company has brought wealth back to the port, taking pre-tax profits from £800,000 in 1984 to £46.7m by 1998

Challenges: Bootle was named Britain's poorest area this week; Liverpool FC has not won a trophy since 1995