Factory of broken dreams: The demise of Britain's textile industry is leaving behind impressive buildings

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The walls are as gleaming white, the herringbone parquet floor as flawless as if it were laid last week. On the welcome mat inside the entrance porch, the company crest bears the motto: 'Industry, Inspiration, Cooperation'.

Only the dust gives it away, and the silence. There are no people here any more, though the ghosts of past occupants are everywhere. In the boardroom, eight padded club chairs dressed in soft teal leather still sit around the board table as if waiting for the weekly meeting. On the wall, a polished chrome dial points out the hour: a quarter to three.

It is as though time has stood still since the summer day in 1939 when W Pearce & Co leatherworks factory opened its doors for the first time – for the building at least; the company has not been so lucky. W Pearce & Cof ceased production in 2002 and its assets, including the Grade II-listed art deco factory and the greenbelt land near Northampton it stands upon, have since been sold off to developers. Now the rooftops of a new estate – 120 houses designed with the factory's elegant features in mind – can be seen peeking above a hillock to its rear.

Development of the factory itself – perversely – has been hamstrung by its remarkably untouched condition, with its plethora of original features and 1930s detailing. "It's so perfectly preserved," says Michael Pearson, former managing director of the company he knows simply as Pearce's. "It's not a typical industrial building, that is why it's so very, very special."

But while Pearce's may not look like other factories, it shares the same fate as so many industrial buildings: relics of Britain's manufacturing heritage that, in the wake of the housing boom, have been snapped up by developers and transformed into luxury apartments and offices.

The collapse of Britain's traditional manufacturing industry left huge numbers of these buildings to rot in the latter part of the 20th century. Travel through the north-west and their wasted hulks are hard to miss, folded into the rolling moors of this rugged landscape.

In Bradford, Manningham Mills is a vast, imposing structure that looms large over the city. Built in 1873, at the height of Britain's textile industry, it was the biggest silk factory in the world, importing raw materials from all corners of the empire and employing more than 11,000 people. But as the textile industry in Britain declined in the face of increasing competition from factories abroad, it closed in 1992.

"It had become a very visible sign of decline and deindustrialisation," says Tom Bloxham, whose company, Manchester-based Urban Splash, has converted the massive building into flats and offices. In the early Nineties, the company pioneered the conversion of empty industrial buildings into desirable homes and workplaces. It was a process of re-education, of selling the idea of New York-style loft-living to the ex-industrial heartlands, says Bloxham. "When we were looking at some buildings," he recalls, "the agents said they'd never been considered for residential [use]. We asked why not and they said the windows are too big and the ceilings are too high."

Urban Splash, and companies like it, have found a lucrative niche repackaging these derelict urban spaces as trendy places to live and work. The new residents of Manningham Mills are mostly young professionals in their twenties and thirties, for whom wooden clogs on cobbled streets are ancient history, and whose apartments, with their sleekly anodyne finishes and glass walls have been exorcised of any real sense of industry. Unashamedly targeted at affluent commuters who work in nearby Leeds or Manchester, the development includes an IT hub and fortified underground car park.

But the promise of the property boom is losing its gloss in this run-down part of Bradford and prices for the flats – many of which were bought by investors – have plummeted following the banking crisis. Now investors are lucky if they can cover their mortgages.

It all suggests an economy built on the shifting sands of what Margaret Thatcher liked to call 'economic modernisation'; excitingly inchoate sectors such as finance, property, and now digital technology, that encourage unsustainable booms with huge rewards for those at the centre and growing debt for the sidelined majority. As a nation, Britain has gone from being the workhorse of the world to contributing just 3 per cent of global exports. Manufacturing now accounts for 10.2 per cent of GDP; down from 25.8 per cent in 1979.

Pearce's was one of the last tanneries in the area to close. They had a solid client base that included Dunhill, Mulberry, and Smythson, who all turned to the company for their unparalleled range of specialist leathers. "We had the biggest collection of embossing plates anywhere in the world," says Pearson, "people referred to us as the kings of texture." Now, he reflects sadly, "all this has dissipated. The plates have been sold off to India."

Most of the offices have been emptied of furniture, though in some rooms hefty sample books are piled high in corners, their yellowed and brittle pages like onion skin. It's hard to calculate the variants of colour and style that must make up this immense catalogue.

And in every crevice of the building, the smell of leather hangs heavy still; a rich, velvety tang that speaks of its past in a clearer, more lugubrious tone than words can muster. Behind the offices lies the vast tannery. Earmarked for demolition, it is a desolate place now. Stripped of its machinery and tools, it seems emasculated, denuded of the vitality and energy that made this one of the busiest leather factories in Britain.

Pearce's downfall was a sudden one, explains Pearson, whose grandfather was one of the three founders. "We were doing great guns, but for two or three years our profits were being hit." Like many manufacturers, it faltered as rivals in developing countries starting snapping at its heels. "India and South America were producing more finished leather at very low prices," he says, "and so it became more competitive. We realised we had to downsize to survive, but it was a hard thing for us to accept the fact that we were going to make a lot of people redundant."

Both he and his cousin David Pearce – also a grandson of one of the original co-founders – felt "too close to the coal face" to decide who should stay and who should go. A consultant was brought in to help them recalibrate the business towards reduced runs of more bespoke leathers, and an inevitably smaller workforce.

But a year later, Pearce's went into administration and its assets were sold off. The episode divided the family business down the middle, with Pearson on one side of the fence, believing the company could have been saved, and Pearce, less sanguine, on the other.

"I know we could have retained something of the business even if we had to radically change," says Pearson. "I have a basic feeling that there are so many companies where 'short-termism' dictates. There's too much profiteering by companies saying we could make more profit for our shareholders by selling up. Albeit that you're employing people."

It's a sentiment that echoes Ed Miliband's distinction between the 'producers' and 'predators' in Britain's flagging economy; between wealth creators and asset-strippers. Of course, he was not the first to highlight such dangers. Michael Heseltine, one-time president of the board of trade warned back in 1993 of the "deep-seated short-term attitudes" that "have encouraged growth in companies by acquisition and financial engineering".

For Pearson, so used to the avuncular workings of Pearce's, it was an eye-opener. "I probably should have been more worldly-wise and realised…" he tails off. "The workforce were devastated. Even now I find it very hard to understand."

Indeed, the leather industry should have been one of our most resilient. Britain has been producing leather and making things out of it since the Middle Ages. On the production side, it has lower labour costs than many other –industries – more is spent on material than wages. On the manufacturing side, unlike the assembly-chains of some industries, it has skills that take many years to learn, passed down through generations.

Tell that to the people of Walsall. In the heart of the Black Country, this is a town that knows all about the decline of leatherworking. At its height, around 1900, there were about 150 factories here, making saddlery, bridlewear and other goods.

Today there are around 40 factories and the prospects for longevity are shaky with few young people coming into the trade to replace retiring skilled workers. "We lost probably one of the top five saddlers that's ever lived in November last year," says James Hitchen, whose company, Barnsby, holds the royal warrant for saddlery. "Every time someone like that retires you lose a little bit from the industry," he says, "because they're irreplaceable, there's nothing written down. It's an art form." The art form is dying out now, because, as Hitchen says, businesses can't rely too heavily on one master craftsman so they spread the more skilful parts of the craft among many.

Now, the empty factories, weed-filled and riven by tree roots, sit at intersections like sad monoliths to a prosperity long gone. But Walsall is in the process of regeneration. With a £400m 'Gigaport' under construction, offering superfast broadband and high-spec offices to the 'finance, media, and digital industries', the town hopes to attract technology businesses and software start-ups; a silicon dream built in a hinterland of broken glass and half-buried bricks.

Though, for some, the optimism around the much vaunted 'technology revolution' – a new engine for Britain's stalled economy – is simply papering over the gaping void left by Britain's dwindling industry with blueprints for e-businesses and hi-tech hook-ups.

Indeed the hype surrounding the digital sector is wearing thin, and even George Osborne has turned his attention to the neglected manufacturing industry. In his budget speech last year, he talked optimistically of a new era of British productivity – a "march of the makers" who will "drive our nation forward".

Pearson agrees there is potential in 'brand Britain'. "I think we understand the value of the name of Britain in manufacture," he says. It's just too bad the light has gone out on the UK's industrial sector: "You can't suddenly switch on an industry, because the infrastructure's gone," he observes. He has a point. Where huge weaving machines and tanning pits once sat, now there are young couples eating their breakfasts at shiny new counter tops, trying not to think about the debt they're in.

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