The Liverpool renaissance

One of Britain’s greatest cities has spent decades in the economic doldrums. Now as it prepares to take over as European Capital of Culture 2008, can Merseyside really get back to where she once belonged? Peter Stanford reports. Photography by Simon Roberts

Liverpool's main Lime Street railway station has had many cosmetic nips and tucks in recent decades, each remodelling of the Victorian original – the placards have told returning Scousers – designed to make it a fitting gateway to a city that is definitely on the up. Then you would step outside to be greeted by the same old picture of decay – a picture that made this writer, and hundreds of thousands like me, move away in the first place.

The first sight to greet you – on the other side of the vast open-air arena of St George's Plateau, where Liverpudlians gather en masse in times of sadness and joy (football victories, the death of John Lennon, long-forgotten trade union rallies) – is St George's Hall, a Grade-One-listed Grecian wedding cake of a place, described by some architectural historians as the finest neo-classical building in Britain. Built as a courthouse and concert hall on a truly monumental scale in the 1850s, and boasting the world's first air-conditioning system, it was an unambiguous statement by the mercantile élite of Liverpool that they were sure the commercial success of their port would enable "the Second City of Empire" to prosper ever after.

They were wrong. For as long as I can remember, St George's Hall has been slowly crumbling, an all-too-obvious metaphor for a city in deep decline, with the loss of thousands of jobs in the docks, factory after factory closing, and a level of depopulation that almost rivals the Highland clearances of the 18th century. In the dark era when Derek Hatton and Militant Tendency controlled the council in the 1980s, St George's Hall was all but boarded up.

But today, walking out of Lime Street, it is looking fabulous. As indeed it should. It has just undergone a £23m refurbishment. Even the lions on the plinths that surround it seem to be smiling. The symbolism – for me, at least – is unavoidable. The confidence and swagger has returned to St George's Hall and, with the start of Liverpool's reign as European Capital of Culture now only weeks away, is returning to the city too.

You can't fail but see it. The famous skyline is cluttered with cranes as new apartment blocks, shops and offices near completion. Even the cruise liners are coming back to the iconic Pier Head after an absence of many decades. And you can almost hear the changes afoot. Liverpudlians have never been short of pride in their birthplace, more a fierce patriotism than a mundane regional identity, but even the diehards have struggled to keep it up over the past half century when the topic moves away from football. Yet something is now shifting.

"I come into the city centre by bus every day and there is only one thing people are talking about," says Claire McColgan. "European Capital of Culture 2008. The expectation in the city is huge." There have, of course, been far too many renaissances that turned out to be false dawns, so we shouldn't take these overheard and possibly overheated conversations as gospel. And McColgan, it should be added, is a senior producer on the Capital of Culture project, so may not be entirely neutral.

Yet the observations she shares chime with the general banter abroad in the city. And they are more or less borne out by other seasoned Liverpool aficionados, like the popular Radio Merseyside talk-show host, Roger Phillips. "Certainly when we heard we'd won back in 2003, people were over the moon. Tessa Jowell, the Culture Secretary, was spontaneously mobbed when she arrived at the station in Liverpool. She said she'd never felt like a pop star before," he recalls. "Over the five-year build-up, that couldn't last, and it didn't for all sorts of reasons, good and bad, but I do feel the enthusiasm is now creeping back as the launch date is getting closer. There is an optimism that something good is about to happen."

On 12 January 2008, the new arena and conference centre, built on the old King's Dock and shaped like a seagull, will play host as Ringo Starr and assorted other luminaries (some of their names as yet under wraps) cut the ribbon on Liverpool's 12 months as European Capital of Culture. It is easy to be cynical. Of course, in one sense, the hype seems ludicrous. Even the tollbooths on the Mersey Tunnels are decked out in Capital of Culture livery, but how many of those passing through them on their way in and out of the city could name last year's recipient?

Yet there is undeniably a hope – not quite a belief but more than a dream – that the year-long celebration may just highlight a change of fortune that has been underway in Liverpool for some time now, and which may, just may, bring to an end the city's unenviable status as the economic basketcase of Britain.

Liverpudlians are, according to the creative chair of the Capital of Culture, TV producer Phil Redmond, prone to airing issues publicly in "one-big Scouse debating society". And there are inevitably sceptics making themselves heard amid the general climate of anticipation. They worry that once the anticipated 1.7m extra visitors brought in by Capital of Culture have exited via John Lennon International Airport, the city may simply resume the pattern of long-term decline. Remember Michael Heseltine's Liverpool International Garden Festival in 1984, they ask? It aimed to jumpstart regeneration after the Toxteth Riots with an attention-grabbing event, but today most of its site down in Dingle is derelict, its Festival Hall demolished.

Even the feted Albert Dock renewal can be used against Liverpool. The 19th-century warehouses, the largest Grade-One-listed complex in Britain, were reopened in 1988 with shops, bars, museums and the Richard and Judy TV studios, but have since stood geographically and arguably economically apart in splendid isolation from the rest of the city, in the middle of an urban wasteland of car parks on the waterfront, struggling to find a clear identity, especially after This Morning decamped in 1996.

This time round, though, the headline story of renewal does appear to have more to it than simply the faith of a city desperate for good news. Capital of Culture is not so much being seen as the motor of rebirth, but as a showcase for Liverpool, an opportunity to use what the outside world admires in it – its ability to produce disproportionately large numbers of talented singers, writers, poets, musicians, actors, painters, comedians – to draw people to the city so they can witness at first hand the new economic realities and commercial potential of the place.

Exposure, the theory goes, is how you change entrenched attitudes. So somewhere in there too is the hope that a year in the spotlight will alter the negative preconceptions that have grown up elsewhere around the name of Liverpool, those personified in the good-hearted but unreliable "scally", a stock character in Redmond's TV soap opera, Brookside. Earlier this year I took part in a debate organised by the BBC at a Liverpool secondary school. A fellow panellist, a Liberal Democrat peer from elsewhere, when we were asked what Capital of Culture would do for the city, joked that it would keep the accountants busy working out what had really happened to the money that comes with it. The audience all but booed, and quite right too, but it was a stark example of the prejudices Liverpool is up against.

"We believe," says Jim Gill, the bullish chief executive of Liverpool Vision, an organisation bringing together European, national, regional and local government initiatives to renew the city, "that we have broken the spiral of decline in Liverpool, that sense that it was always last in and first out of every economic cycle, that every Friday evening would see the announcement of another employer shutting up shop. We've got the inward investment coming in now. We're providing the infrastructure and premises. We know where we are going and how we are going to get there. The challenge is to convince others that Liverpool is an attractive place to live and work. And Capital of Culture provides an effective mechanism for Liverpool to sell itself."

A shop window only works, of course, if the store can then deliver the goods. So far Capital of Culture is keeping up with demand – just. With so much talk of the year as a marketing opportunity for the city's revived economy, there may have been a tendency to overlook the challenge of drawing up an impressive programme of cultural events. But when it was finally published in September, it got the thumbs up. The subsequent announcement that MTV Europe's Music Awards were coming to the city in 2008 caused a few jaws to drop in amazement.

There has been some local grumbling, Phil Redmond acknowledges, about "the lack of real culture, popular culture. People said it was fine having Simon Rattle at the Philharmonic Hall and Gustave Klimt [at Tate Liverpool] but where were Macca, Cilla and Tarby?" Paul McCartney is certainly there in the programme– performing in June at Anfield – and Redmond promises that Black and Tarbuck will be joining the list after all.

The performance of the Culture Company – the offshoot organisation set up by the Liberal Democrat-controlled city council to run Capital of Culture – has likewise been criticised locally, most passionately for cancelling in some disarray the popular summertime Mathew Street Festival around the old Cavern Club earlier this year on safety grounds. It attracted a wider negative press when, in 2006, its Australian artistic director Robyn Archer quit. But Redmond again is adamant that all these details will be forgotten once 2008 gets under way, likening the rows to "a typical Scouse wedding. Everyone argues on the Friday but by the Saturday they all turn up at the church and have a great time."

Some recent visitors have also worried that newcomers to the city in 2008 will be disappointed to be greeted by building sites rather than temples of culture. This "rape" of Liverpool is a tragedy, the critic Waldemar Januszczak wrote after attending the recent Turner Prize ceremony at Tate Liverpool in the Albert Dock. But there is, of course, another way of seeing it. Liverpool has the feel of a work in progress, and there is, even for the outsider or long-time exile, a thrill about witnessing and even being part of that.

To check out how far that broader agenda for Capital of Culture is likely to be realised, I set off on a kind of magical mystery tour down to the waterfront, once the heartbeat of the city. There's talk of reviving a tramway to join up the various quarters of inner-city Liverpool, but they're currently on hold. But it's a tight-packed centre and you can cross from one side to the other on foot in less than 20 minutes. From Jim Gill's offices, it's an easy enough trot down Dale Street to the Pier Head.

The route takes me through the old business quarter where plenty of grand Victorian office blocks are being refurbished alongside new, shiny, glass and steel interlopers. Take-up rates for office space, Jim Gill reports, are double that of the 1990s with rents rising towards the levels enjoyed in Liverpool's long-time rival, Manchester. He ascribes a lot of this to pent-up demand in existing legal, accountancy and financial firms, but highlights too the start of an influx, with City of London firms like money managers Rathbones opening up a UK centre for back-office operations in Liverpool.

There are certainly as many "To Let" boards as "Let By" ones, but that is a sign, Gill would no doubt tell me, that the right sort of premises to attract businesses are now on the market. Dermot Finch of the independent urban-research unit, The Centre for Cities, does, however, raise a note of caution. He points out that one of Liverpool's abiding problems has been the extremely high level of unqualified people in its workforce – currently 29 per cent compared to 19 per cent in Manchester and just 8 per cent in Reading. Bringing new life to the commercial centre is going to require qualified manpower. With such a skills deficit, there is a risk that new jobs being created will go to outsiders and leave unchanged the city's unemployment rate – at 3.9 per cent well above the national average of 2.3 per cent.

Once it was the councillors in the Town Hall that juts out between Dale Street and Water Street who felt it was their task – and their task alone – to bring down that unemployment rate. Part of the disastrous Militant experiment in the city in the late 1980s was expanding the Council's workforce until it was unsustainable. Municipal socialism has now given way to a pragmatic Liberal Democracy majority. Rather than trying to employ everyone who pleaded "Gissa Job" – in Yosser Hughes's memorable phrase from Alan Bleasdale's 1982 Liverpool-based drama, Boys from the Blackstuff – the Lib Dems have concentrated on improving educational achievement in the next generation. "We inherited a failing education department," recalls the Leader of the Council, Warren Bradley, "but we have been patiently building it up so that the percentage achieving five decent GCSEs has risen from 31 to 62 per cent in 2007."

Their task has undoubtedly been made immeasurably easier by the more than £20m of European Union funding given to Liverpool since the mid-1990s because the city's economic indicators had dropped so lowthat it qualified for Objective One status and money. Again the local sceptics wonder aloud where all that European funding has gone. One theory is that some simply went on keeping the city afloat after the disasters of the Militant era which left Liverpool with the highest council tax and, according to government inspectors, the second worst services in the country.

Whatever the truth of it, the Brussels tap is now shut off because of the accession of more needy Eastern European states to the Union. The years of handouts are all but over. Capital of Culture year therefore marks another watershed. Will Liverpool be able to stand on its own two feet again after one of the longest periods in rehab in recent history?

Down on the waterfront, it is possible to get at least an impression of its chances of making a full recovery. It was the docks that made Liverpool successful. Initially they pinched the transatlantic trade in slaves from Bristol and went on in their late-Victorian heyday to eclipse all their rivals as they expanded on to both banks of the Mersey, handling, possessing and distributing anything and everything.

There is therefore something fitting in seeing that the current from-the-ashes regeneration of Liverpool is breathing new life into the banks of the Mersey. To the north of the Pier Head, there are new hotels, plus residential and office accommodation. The developer, Peel, owner of the Trafford Centre in Manchester, has announced visionary plans to transform over the next 50 years the now all-but-abandoned North Docks into a skyscraper city of the future, doubling Liverpool's population of 400,000. It is being described, with the usual local hyperbole, as a potential rival to Shanghai.

More tangible, to the south of the Pier Head, are the construction works for the new Museum of Liverpool Life, rising in the spot initially earmarked for adding a fourth to the famed "Three Graces" (the Liver Building, the Cunard Building and the Port of Liverpool Building). This was where Will Alsop's much heralded "Cloud" design was going to stand, but it proved a divisive design for a Unesco World Heritage site and was abandoned in 2004.

Behind the new museum will be flats, hotels and offices. Meanwhile on the other side of the Albert Dock, around the new arena, are more retail, leisure and housing developments. These aren't pipe dreams. Most of the ground works have started, but who is going to live in all these flats, I'd asked Jim Gill, conscious that in my childhood the mark of success for a Liverpool family was to move out of the old inner-city area to the outer suburbs, or better still Southport, the Wirral or North Wales. "Around half of them have gone to investors already," he reassured me. "And developers don't get involved unless they can see a market."

The logic of the market was the bedrock of Liverpool's success in its prime, so it would be foolish to knock it now. I can't help wondering, though, why it has taken so long for the outside world to spot the potential market in Liverpool. Surely it must have been there all along. Perhaps it is another case of needing to get behind the negative perceptions.

And any romantic hankering after a factory or two is also, by historical standards, misguided. Liverpool was never a city that made things. It traded them and moved them round. So there are good precedents for the belief that the future lies in service industries rather than repeating the failed efforts of the 1950s and 1960s in importing manufacturing to an already ailing Merseyside.

Unlike those attempts at state-aided economic intervention, the spectacular centrepiece of the current regeneration, the £1 billion Liverpool One project, is an entirely private-sector affair spearheaded by Grosvenor, the property company of the Duke of Westminster, Britain's largest private landowner. Signed off before bidding for Capital of Culture even began, and arguably the key piece in the jigsaw of renewal, this scheme currently dominates the view back from the waterfront to the city centre and will unite what I always remember feeling like two entirely separate places – the shops and the river.

The scale of Liverpool One's ambitions – again appropriate in a city that used to make its money by thinking big – is staggering. As is its potential effect for confidence in Liverpool. It will be an entire streetscape of shops, cafes, hotels, parks and flats, growing out of what was an area of derelict land around Paradise Street. The new development will consist of 30 new buildings, designed by 26 firms of architects, over 42 acres. The few surviving older buildings have been saved and refurbished, while with deliberate symbolism – "to show we're not all philistines," remarks Rod Holmes, the project director – the showpiece public space in the complex opens on to the River Mersey at precisely the point where, in 1715, Thomas Steers, an engineer, later mayor of the city, opened the world's first wet dock (where the level of water is maintained despite the tide).

Again, the symbolism of the new rising out of the old is potent in a city with such a strong sense of its own history. The old Steers' dock, the birthplace of Liverpool's once booming economy, has been excavated and part of it will now be on show to the public. Culture and commerce are apparently going hand in hand.

As Holmes shows me round the site, one question seems unavoidable. Where is the consumer demand for so many more shops and cafes? Capital of Culture will provide a one-off boost, but what about the long-term? Liverpool, Holmes explains patiently, used to rank third in retailers' desired destinations in 1971. Recently it has fallen as low as the late teens, but the market in the city's extensive hinterland remains, prosperous but currently bypassing Liverpool for Chester and Manchester. The aim is to bring them back into the city centre.

As well as being the name of Grosvenor's project, Liverpool One is also the postcode and local name for the small pockets of modern public housing and occasional terrace of older houses that have survived the bombs and bulldozers in this inner core of the city. Joe Anderson is the local councillor and also heads the Labour opposition at the Town Hall. He meets me outside Grosvenor's vast building site and, without ever escaping the shadow of the cranes, we are quickly in a maze of neat streets round St Vincent de Paul primary school.

Anderson, a local man who shows me the house where he grew up, is clearly making a concerted effort not to knock the regeneration going on in the city. It would be letting the side down. But he cannot help but wonder, he explains as we tour the streets, at the price some local residents are paying. The smart new apartment block, for instance, dwarfs the bungalows in Tabley Street. Residents suddenly found they couldn't get TV reception. When they want repairs done to their council houses, Anderson reports, they find the construction boom doesn't include them. "It is as if the Liverpool One development has stolen their name and made them invisible," he laments.

This takes us to the heart of his worry, namely that for local people like many of his constituents who have suffered poor housing and long-term unemployment, all the building and bunting surrounding Capital of Culture, and the broader regeneration that it is hoped will come with it, won't make a positive impact on them. They won't get the jobs created. They won't be able to afford the prices in the new bars and cafes. "A lot of people in Liverpool are worrying if we have our priorities wrong," Anderson wonders aloud. "We should be delighted about what's happening but right now it doesn't feel like it's happening to us. And we're the ones who end up paying for it through our council tax."

His charges are easier to answer in the context of the Capital of Culture programme. Since Phil Redmond joined the board earlier this year, there has been a far greater emphasis placed on providing events for local people to join in the festivities to balance the big names coming, or returning, from outside. The broader economic regeneration, though, may indeed leave them out in the cold, even though it is happening on their doorsteps. But you could argue that Liverpool has spent a good four decades trying, usually unfashionably and cackhandedly, the bottom-up approach to regeneration with precious little success in terms of sustainability or jobs. The time may have come for something different if the whole city isn't going to slip into terminal decline.

And already there are promising signs. Depopulation has halted according to the latest census. Economic growth rates are on the up. Business confidence is growing. And there is that buzz about the place. Somehow the cocktail of commerce and culture, twin ingredients in Liverpool's colourful past, seems to have succeeded in whetting local appetites for a different kind of future for the city.

As a taster of its commitment to public art in 2008, the Culture Company has joined forces with the Liverpool Biennial, organisers of the city's festival of modern art, to fund a striking piece of work by the twice Turner Prize-nominated sculptor Richard Wilson. At Cross Keyes House, he has cut an eight-metre ovoid out of the undistinguished glass and concrete façade of an empty 1960s office building above a disused Yates Wine Lodge. The excised section has then been mounted on a pivot inside the building and rotates in the gap it has left.

Sometimes it sits flush and you see again the familiar image of a boarded up, redundant Liverpool. Then it swings around on its fulcrum, and affords you a glimpse inside of its workings, of something new and unexpected. It is an apt metaphor for a city in the process of major league change. Standing watching it, I much prefer the moments when you are allowed a peep behind the familiar facade. When the cutaway comes round once more to complete old front of the office block, I move away.