Greater…. – a role model for Birmingham ?

Cities offering themselves as sites for foreign manufacturing companies to make and sell into  their national market can be found all over the world today.

A hundred years ago only one city was systematically doing this in Europe. But far from being a road to prosperity, that city was not one of the few that can claim to have avoided the depression of the interwar years.

And if that city, and it was a British city, saw questionable benefit; it cannot be Victorian Town Hallsaid that the national economy benefited either.  Quite the contrary.

A century of experience

In 1914 the biggest automobile producer in Europe was one of the US giants, and it had been based in this English city since 1911. And although it was used as a base for exporting into Europe, such production would hamper emerging British automotive  producers more than it would hamper Citroen in France or Opel in Germany.

The City in question here was certainly not Birmingham. The political and business leadership of this city would never have gone seeking foreign inward investment. Their answer to the American and German industries taking their customers was to seek to foster the British Empire as a preserve for British exporters. This was what lay behind the Tariff Reform campaign loudly launched by Joe Chamberlain in 1903. This protectionism became known as the ‘Birmingham economics’ as it came to be the official policy of the Conservative and Unionist parties.

Greater_Birmingham_reducedThe Birmingham label would have been prompted by memories of the Victorian Prime Minister Disraeli. He had led the resistance to the huge urban movement to scrap customs duties designed to protect British agriculture. To Disraeli, Manchester was the main base for this free trade philosophy which he called ‘Manchester economics’.

As Chamberlain’s scheme became central to the national debate it got dubbed the Birmingham economics. It seemed the opposite to Manchester… And Manchester between 1905 and 1914 seemed to be the base for the key opponents of Chamberlain’s ideas.

Manchester, it was also, who had offered themselves as a base for Ford Motors of Detroit in England and its markets.

Manchester Economics

Having built a ship canal all the way from Liverpool to Manchester was the basis of Nicholls Trafford Parkthis offer. And then an industrial estate was built on the edge of the conurbation by the people who built the canal.  This brought in mainly US companies. This estate has since been called Trafford Park. And it was all done in the decade before Chamberlain’s protectionism debate.

Westinghouse, the US electrical giant, as well as Esso were there before Ford. More details of these companies can be found here.

By 1910 the opposition to Chamberlain was mainly voiced by the Liberal Party for whom the Manchester Guardian was the regimental bugler. The Manchester Liberals brought their resistance to the Chamberlain agenda to a crescendo during December 1909 as part of the election campaign over Lloyd-George’s ‘People’s Budget’.

The Liberal establishment  rallied at Manchester’s town hall (Free Trade Hall), and the key note speech was carried almost verbatim  by the Guardian, whose editor sat along side the cabinet minister who was making the key note speech.

Archive Logo ‘  Why,   what is the Manchester Ship Canal ?  It is a channel to enable foreign goods to be imported cheaply into this country; –  ( Hear. hear )   It is a tube to bring dumping into the very heart of our national life. And you have built it: you have built this canal yourselves; you have built it at great cost; you have dragged the Trojan horse within your own walls yourselves – (cheers).  But more; you have grown fat in the process of committing this extraordinary folly.’

Whether the cheering audience were aware that the minister had substantial shareholdings in the US railways that brought US goods to their embarkation, we do not know. But they might have had some idea. It was well known that the speaker’s mother was daughter of a Wall St speculator.

Our cabinet minister had already represented two seats in what is now GreaterYoung_Winston Manchester.  The very first of which was Oldham, as those who have seen Richard Attenborough’s film of his early life may recall.

But by 1909 he had lost both these seats and sat for Dundee. But ‘Manchesterism’ had no more ferocious champion, so he still had centre stage at Free Trade Hall that December. Later his son Randolph would sit for neighbouring Preston and our speaker’s grandson also called Winston would be both MP for Stretford until 1997 and on the board of the Trafford Park company itself – part of which lay in his constituency.

Downfall of Birmingham

Had a few things not gone so well for Hitler at the start of 1940, it was never inevitable that Chamberlain would have been ousted from leadership of the UK.

Then the Birmingham model of economic development would not have been so systematically forgotten as Churchill becomes a national icon.

Berrow CourtWe have already done an outline of how the business forces behind Chamberlain and Baldwin in the 1920s and 1930s pursued regional and national priorities. But much of this is totally forgotten today, even in Birmingham. Hence it could be thought that there had never been any alternative to looking to foreign and US investors for the country’s future.

But there was. Manchester was never convinced by Churchill and the liberals. Manchester voted Churchill out, and Chamberlain supporters could win in Manchester. But Manchester economics never had any traction in Birmingham. Churchill was actually President of the Board of Trade when he was finally voted out in Manchester.

A model for economic development ?

By the 1920s Manchester was an economically distressed area. Ford moved out in 1931. Birmingham’s home-grown automotive companies were only just beginning to become significant both in Birmingham and the national economy.Shameless At the beginning of the current century it is hard to say Manchester was fat for long. In popular culture, Manchester is known for foreign-owned football, but otherwise Coronation St and Shameless.

However, the West Midlands is now being pressed to re-style itself as a Greater Birmingham in the quest for profile with overseas capital. But unless one is so close up to it that one cannot see the wood for the trees, can anyone really see that many lessons for Birmingham coming out of Greater Manchester?

Fifty years ago no one would think to find much that Birmingham could learn from Manchester in terms of economic development.  That they might now think they can, may well be because Birmingham now has no more idea of how to give a lead to the business sectors of provincial England than Manchester ever did.

Andrew Lydon

 

Adam Smith’s invisible hand and visible hands in Birmingham

Birmingham has long been a city with some of the highest levels of deprivation in western Europe, living with fears for the future as the loss of big manufacturing becomes apparently permanent.

However, within living memory the city became the UK’s second city, and achieved an economic peak during the 1920s and 1930s – times that for Manchester and most American cities were very tough.

Neville Chamberlain and Stanley Baldwin were major reasons for Birmingham’s success. Theirs is a story that contradicts that of Michael Heseltine, who conjures up illusions about a ‘buccaneering’   entrepreneurial past. A story that underpinned his now clearly failed attempt to forge a common agenda between provincial English business (centered on Local Enterprise Partnerships) and the Downing St of today.

appeasementThe Appeasement of Adolf Hitler has cast a shadow over proper understanding of the era of Birmingham’s expansion. This appeasement occurred before the suburbs where most Birmingham people now live, had come to need their original paintwork renewing.

Local historians have been less effected by such political and  obsuring shadows. And one can find glimpses  in local history of  how Baldwin and Chamberlain and their people worked.

For much of the interwar period one or both of them were tenants in Downing Street. Either as Prime Minister or as Chancellor.

Business alliance

Both were elected from the West Midlands, but there was more to it than that. Kenrick coverTheir families had since 1887 both been in alliance with the Midland’s premier business family – the Kenricks.

As the First World War ended, Kenricks were at the heart of the trade ( the cartels) that supplied baths, cisterns and the metal components that would profit from any house building boom. The Baldwins were major shareholders in Kenricks since selling out their factories in Stourport-upon-Severn.

Neville Chamberlain’s mother was a Kenrick. And her early death meant that he spent most of his childhood at the Kenrick’s main family home – Berrow Court, at Edgbaston in Birmingham.

Berrow CourtAlthough Neville ran a firm of his own, that boasted of being an ‘Admiralty Supplier’ on its letterhead, around  1913 he brought in about a quarter of his income from a second job -chairing a Kenrick owned company.  This company,  called Elliots, made the copper for the plumbing and wiring that building now required, and was the base material for the bulk of Birmingham firms who were then geared towards home-making goods, rather than the automotive bits of  later decades. Indeed as the base for Ford in the UK,   Manchester could until 1929 better claim to be the UK Automotive city.

Homes for Heroes

That Neville Chamberlain would  be the most important figure behind the building of the interwar suburbs, should be seen against this industrial  background. For much of the interwar years he was acting for a cabinet led by Stanley Baldwin.Baldwin

Birmingham was first out of the stocks with building ‘homes fit for heros’ in 1919.  Manchester and Glasgow, Birmingham’s main rivals trailed. Shipbuilding and textiles did not sniff such profit in housing. Nor had either been prepared for a house building campaign.  Manchester did not have much room to expand, being hemmed in by industrial townships like Oldham and Salford in every direction except southwards into Cheshire. Manchester would not get round to buying up land until the end of the 1920s. Neville would be the minister who would assist the setting up of a Manchester Regional Plan in 1927, for the neighbouring councils to co-operate in Manchester’s overspill.

Building the suburbs

Birmingham had not needed any such help, when as a Ladywood councillor Neville had lead the lobbying for Birmingham to expand into the rural districts surrounding  it  in every direction except to the west – where the Black Country lay. This 1911 Birmingham boundary extension assumed future housing estates, the case for which he led the elaboration of – on the very eve of the 1914 war.

This experience in Birmingham gave him a status as a housing expert when he got to Parliament to represent Ladywood in 1918. Conservatives had tended to favour property tax incentives to encourage building, but Neville leaned towards government subsidy. It was no coincidence that subsidy for both private and council house building were introduced by Neville’s brother, when he was chancellor in 1919 (and his deputy was Stanley Baldwin). And this subsidy was rapidly taken up by Birmingham builders.

Manchester, however, was not yet going to be contributing to the profits of firms the likes of Kenricks.  Areas reliant upon textiles and other depressed industries could not afford building without even further subsidy. Led by Manchester, these councils sought an improved subsidy for building council houses in 1923. Baldwin was then chancellor, which ensured Neville ( as Health Minister) had a free enough hand to cut them a better deal. And on this basis, Manchester built out to the south into Wythenshaw.  Orders came Birmingham’s way – as a simple matter of trade association quota.

SmithWhile some might have been wittering on about the wonders worked by the ‘invisible hand’ of the free market, hands were visible reaching down to co-ordinate production, strategic subsidy and government policy – if one knew where to look. This would not be lost on the big banks – who were generous with overdrafts to the businesses so close to Downing St. There was also a Kenrick on the board of Lloyds Bank during those years. So credit got co-ordinated too.

Such strategic planning has more in common with the political economy of China in recent decades, then with the visions of Adam Smith and his invisible hand.  And it is worth bearing this in mind when one examines a further twist in this story.

Confronting the Brick interests

The interwar expansion of the English suburbs was based on bricks rather thanbrickwork any other building material.  And brick is so energy inefficient that it is now a major challenge for today’s suburban life. However, the brick economy was in the 1920s a major drag on the housing boom. Labour tended to blame profiteering on the part of brick manufacturers, while the conservatives tended to blame the bricklayer’s monopoly in the face of the laboriousness of  bricklaying.  But – whichever – this was hampering the flow of Birmingham’s supplies to a housing boom and the rewards.

However, in the late 1920s the brick industry came to have to accept less favourable terms.  It had been during a Labour interlude in office, that their housing minister, John Wheatley began a review of whether new building methods could speed up the delivery of cheap popular housing.  But when Neville got back into the ministerial driving seat he pushed this debate even further.

Houses built from bigger concrete ‘breeze blocks’ were encouraged. But even more radical options were ‘promoted’ by Neville.  He even fostered a scheme to use elements of the Glasgow shipbuilding industry to mass produce the panels for steel bungalows. Pushing such discussion so far, worked its effect on the brick interests, and delivered more profit thereafter for Birmingham than for Glasgow.

Drawing the right/wrong lessons

Since Chamberlain was displaced from power in 1940, the only city that Heseltine   has been able to tug so regularly upon the levers of power has been the ‘City of London’.  The lessons that can be drawn from the rise and fall of Birmingham are legion. However, our purpose here is to weigh up the agenda that Lord Heseltine has been pressing.

Heseltine began life as a ‘buy to let’  landlord who used his profits to become an advertiser/publisher. After going into politics he was a sort of Viceroy for Liverpool for Mrs Thatcher, whom he later sought to replace with himself. Liverpool did build its position on slavery and what went with it. Maybe that is where he gets his notion of a bucaneer capitalism.  But that label also fits himself. And fits him better than it does any inland city, and certainly better than Birmingham.

Birmingham’s experience would really highlight notions of planning, local committment, addressing social need ….

Andrew Lydon

An analysis of one of our rival cities can be found here