From the ruins of industrial dereliction, a new district has sprung back to life near the centre of Britain’s second city, Birmingham.
Where factory workers once produced Bird’s custard and the progenitors of Peaky Blinders — the early 20th century gangsters popularised by the BBC — patrolled the smoggy banks of the canals, a myriad of start-ups from micro-distilleries to independent filmmakers, have taken root. The old industrial wastelands of Digbeth that fringed the city centre have been reborn.
“It’s like Brooklyn before Brooklyn got expensive,” says Melissa Snover, a New Yorker, who chose to set up her high-tech nutrition company, Nourished, in Digbeth partly because rents are comparatively cheap and partly because there is plenty of tech talent from the city universities.
The demolition of high-rise buildings and highways that once ringed the city has liberated Digbeth and allowed it to gradually reintegrate with Birmingham’s centre as part of a much larger multibillion pound regeneration programme of public and private investment.
This has seen the city, and the wider West Midlands region it is part of, become one of the brighter spots in the UK economy. It is now growing faster than any other city region outside London, with output up by 35 per cent over the past five years.
The region is also becoming a flagship for devolved government that led two years ago to the election of six metro mayors, including Birmingham, Manchester and Liverpool.
“Before you would have come to Birmingham, got out at New Street station and thought ‘no thanks’ and gone on,” said Waheed Nazir, corporate director for economy at the city council, who has been at the heart of regeneration plans since 2012.
What sets the city’s recent transformation apart, said Mr Nazir, is the speed with which it has taken place, despite an initially gloomy backdrop. “We were going through one of the worst recessions,” said Mr Nazir of the aftermath of the 2008 financial crisis. “It was a very difficult time, developments stalled. But it was also a great opportunity to set out to do what we wanted.”
That involved expanding the central metropolitan area of Birmingham, pursuing status for it as an enterprise zone with tax incentives to encourage investment, and breaking down concrete barriers — including an old brutalist library — that physically blocked various parts of the city from linking up.
Buttressing these developments has been a large influx of foreign capital, investment in local tram and metro line networks, and the prospect that by 2026 the city will be connected to London by the HS2 high speed rail project.
Since 2010-11 the region has received £1.5bn of public sector money, boosted by £3.1bn of private sector investment, according to the city council. In 2018, the West Midlands was the leading region outside London and the south east for foreign direct investment.
The latest data suggest that Birmingham has found a formula to correct the concentration of growth and wealth in the south east that has coloured both politics and economics of the UK for 40 years.
“The thing that tells you the turnround story is that young Londoners are voting with their feet,” said Andy Street, the former chief executive of department store John Lewis turned Conservative politician, who was elected as the West Midlands Combined Authority (WMCA) mayor in 2017.
In 2018, just over 19,000 people migrated from London to the West Midlands, compared with about 18,272 who moved the other way — a symbolic reversal of a decades-long trend.
The city, held back from “overheating” by Westminster in the 1960s, had been through vertiginous decline, culminating in the closure in 2005 of what was Britain’s largest car plant at Longbridge at the cost of 6,000 jobs. “By 2007 we had the highest population of people with no qualifications and the smallest with good qualifications,” said Mr Street.
“I won’t spin the yarn that everything was terrible and I improved it,” he said, adding that things were already picking up several years before he became the mayor. But he believes his executive role has helped to spread the benefits of Birmingham’s revival to cities such as Wolverhampton and Coventry, under WMCA control, and encouraged joined-up thinking in tackling everything from housing shortages to the decline of high streets.
Wage levels are rising faster than any other region in the UK and about 300,000 jobs have been created in seven years.
That is not to say there are not still big challenges. As recently as 2016 the Resolution Foundation, a think-tank, said in a report that the West Midlands remained near the bottom of the city region league table in terms of productivity. Areas of real deprivation remain cut off from the labour market and struggling with insufficient social housing.
And while unemployment across the area is falling, among 20 to 24-year-olds it rose from 16 per cent to 20 per cent between 2017 and 2018, according to the Office for National Statistics.
Nonetheless, the sense of a city on the up has been underscored not only by the flourishing start-up culture in Digbeth, but also the large scale investment by big financial services companies in the city centre. HSBC moved its UK headquarters to Birmingham last year along with 1,000 jobs.
The city centre has also seen PwC invest in a new regional headquarters as part of expansion plans and to take advantage of the professional talent emerging from higher education. “I look at the city centre and it is unrecognisable from 30 years ago,” said Matt Hammond, regional chair of PwC.
A no-deal Brexit could knock the city back again, warned Mr Street, given how exposed the economy is to goods exports, which contribute a quarter of regional gross domestic product.
He believes deepening the devolution process will be vital to maintaining progress in the aftermath of Brexit. “Better decisions are made if they are taken locally. It empowers people and makes them feel that they have influence over people governing them,” he said.
