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First the docks, now Ford: how Liverpool lost it

Liverpool is back where it started. This is the meaning of Ford's decision last week to declare a third of its Halewood workforce redundant and move Escort production to Spain and Germany.

It was Harold Macmillan's government, nearly 40 years ago, which brought manufacture of the best-selling Escort to Liverpool. In 1959, Ford had been refused permission to expand its factory at Dagenham in Essex and was pushed into building a plant at Halewood, which started producing Anglias in 1963 and then, from 1968, Escorts. At much the same time Triumph, later part of British Leyland, was dragooned into opening manufacturing facilities not far away, at Speke, and General Motors was encouraged to expand its Vauxhall operation at Ellesmere Port, across the Mersey.

The Conservative government of the day believed that the decline of Liverpool from its huge prosperity as a transatlantic port would be arrested by building a motor manufacturing industry. Some 20,000 jobs were directly created in this way and no doubt further service jobs indirectly.

But Speke closed in 1978; the others have since cut back substantially. And when the Japanese started making cars in the United Kingdom, they passed Liverpool by and opened plants in north-east England.

So the Merseyside motor industry is down to 5,000 jobs and shrinking fast. Macmillan's initiative has come to nothing. Indeed in relative terms, as I remember from personal experience, Liverpool was considerably more prosperous in the early Sixties than it is now.

There was nothing inevitable about this decline. British workers can handle new manufacturing or industrial tasks when they get the chance. Over the same period that the Merseyside motor industry has been failing to establish itself, Scotland has created a successful business in manufacturing electronic components. The enormous North Sea oil industry has been created from scratch. And the Japanese motor manufacturers have come back for more, though not on Merseyside.

Why not Liverpool? I believe the casualisation of labour in the docks, which for generations involved hiring men by the day, left a tradition of uncertainty, aggression, and bitterness in industrial relations which permeated the new manufacturing plants. From the Sixties until the late Eighties, Liverpool had the worst industrial relations in the country. In retrospect, this appears a sort of revenge for the terrible exploitation of the 19th and early 20th centuries. The notorious strike of cemetery workers, which left the dead unburied and marked the final "winter of discontent" of the last Labour government in 1978, took place - of course - in Liverpool. Through the Sixties and Seventies, national strikes always lasted longer on Merseyside. When workers elsewhere had gone back, the Liverpool men would still be shouting defiance. Even now, the few remaining Liverpool dockers are in bitter dispute with their employers, exceeding in intransigence the miners' strike of 1984-85. As for Halewood, late in the day it started to raise its productivity to match international standards, but it never completely closed the gap.

Second, the industries created by the rich Atlantic trade were themselves transient. They comprised typical port activities: sugar refining, tobacco manufacture, wheat milling. They were process industries, which gradually deserted the Mersey as the port's traffic declined. They left behind no pool of skilled labour. The only engineering activities took place at Birkenhead, where Cammel Laird was a first-class shipbuilder, so proud in the Fifties to build the Ark Royal for the Royal Navy and then nuclear submarines, and where smaller companies carried out ship repair. Most of these activities have also gone. So have the financial operations associated with a successful port, such as ship-owning and insurance. Cunard left Liverpool long ago, as did Royal Insurance, which had its headquarters there.

This last example is instructive. The Norwich Union has felt no similar need to leave Norwich for London, nor General Accident to desert its Perth base.

It is not as if Liverpool lacks a good infrastructure. Merseyside still has excellent schools; Liverpool University is an effective institution. Local pride and identity is strong, focused on its football teams. Liverpool's pastors, the late Archbishop Worlock, Bishop David Sheppard or Canon Nicholas Frayling, have a national reputation.

But there has been no political leadership of the kind which Manchester demonstrated last week when it obtained permission for the expansion of Manchester Airport. Liverpool's local politics, like its labour relations, were notoriously fractious for most of the 1970s and 1980s. The TV cameras could always find a punch-up at Liverpool Town Hall to film when they ran out of images of striking workers standing round a brazier at the factory gate.

Manchester claims that building a second runway has an employment potential equivalent to 10 Nissan car plants. It forecasts the creation of 7,000 jobs on site and more than 43,000 in the region as passenger movement doubles. The assumption is that good international communications are a strong attraction for business looking for a British base or site for a factory. The road network of north-west England is already good. Liverpool had hoped that its own airport rather than Manchester's would be expanded. But Manchester airport is close enough to serve Liverpool's purposes. A big airport may lack the romance of a bustling port yet it can have the same effect. The news of the second runway is a patch of genuine brightness amidst the gloom of the Ford announcement.