Manchester, to paraphrase John Lewis, the UK department store group, is never knowingly undersold. From the swagger of its football teams, United, the European and World Club champions and City, the world’s richest club, to that of bands such as Oasis and The Stone Roses, there are few on the planet that have not heard of this city of 3m in northern England.

Manchester and its hinterland have punched above their weight since they burst on to the scene in the 18th century as the cradle of the industrial revolution. On a plain, at the foot of the Pennine hills it was blessed with few natural advantages. Cut off from the sea, its business community eventually risked much to build a canal to bring the water – and globalisation – to it.

That same iron self-belief turned a failed Olympic Games bid into a phenomenally successful Commonwealth Games in 2002. It has something else in common with John Lewis, which shares profits with employees – a conviction that all are born equal.

The ornate lobby of the imposing town hall holds the busts of famous scientists, engineers and rabble-rousing free trade campaigners rather than the usual collection of gentry.

Nearby is a statue of a US president – Abraham Lincoln – but it is there to celebrate not him but the tens of thousands of mill workers who suffered hunger during the American civil war to support a boycott of the slave-picked cotton of the south.

The historian AJP Taylor said: “Manchester is the only English city which can look London in the face, not merely as a regional capital but as a rival version of how men should live in a community.”

Remade since an IRA bomb wrecked the city centre in 1996, the fierce rivalry with London, Liverpool and Leeds that spurred it on is increasingly forgotten as the city feels more at ease with itself.

Graeme Whittaker, managing partner of Grant Thornton, the accountants, in the north, has just returned from a year working in the capital. “I find Manchester more cosmopolitan than London,” he says. “With the mayor there now it is all about being a Londoner. Here people just take you as you are. It is an incredibly vibrant city.”

As in London, the streets of Manchester may be paved with gold. Colin Sinclair, chief executive of Midas, the inward investment agency, is typical of those now shaping its future. He began his career running nightclubs in disused warehouses. Tom Bloxham, the founder of Urban Splash, which made city centre living hip again in Britain’s provincial cities, began selling posters in the city as a student. Carol Ainscow, a property developer, helped create its famous nightlife, developing a gay area along its disused canals.

The late Tony Wilson, the TV presenter who founded Factory Records and the Hacienda club, spawned the “Madchester” scene that made the city a Time magazine cover story in 1989.

Sir Howard Bernstein, Manchester City Council chief executive, began his career as a clerk. Sir Richard Leese, the council leader, was a teacher.

John Whittaker, the founder of Peel Holdings, which has had a huge impact as owner of the Ship Canal and the Trafford Centre shopping mall, and is developing MediaCityUK, a new home for the BBC, grew up in the deprived ex-cotton belt of Lancashire.

Yet south of Manchester, Cheshire is home to some of the wealthiest enclaves in the country, though you might not notice in some towns. Martin Kirby, north-west managing director of Tenon, an accountancy firm, says: “There are a lot of great entrepreneurs here. But when you have earned it you don’t flaunt it. There’s a north-south divide about that.”

Mr Sinclair says Manchester sees itself as complementary to London and could pick up businesses as financial services companies, cutting costs, “near-shore” by moving back office functions to cheaper locations.

He says that while the recession had slowed decisions by some companies there is still interest in investing. “We have got a full pipeline,” he says. Greater Manchester already hosts 1,200 foreign companies, accounting for half of gross value added, he says.

The 100,000 undergraduates and wide range of languages help attract foreign investors, adds Mr Sinclair. The airport, the biggest in the UK outside London, is also hugely important.

Bank of New York Mellon, which moved to Manchester in 2005, has 1,000 employees there, almost all hired locally and trained inhouse. Jackie Williams, the Londoner who relocated to manage the move, says that although there was some initial scepticism about the move, it has shaved a third off costs. “We are delighted we did it. I did not expect to to get such good quality people,” she says.

Manchester is also improving its highbrow cultural offering. It is already home to the Hallé Orchestra and Salford’s Lowry centre, while the Manchester International Festival is developing fast. The council hopes to persuade the Royal Opera House to establish a northern base in the city.

However, weaknesses remain. Mark Blakemore, Manchester office managing partner of Baker Tilly, says: “We have lots of entrepreneurs but very few plcs that are headquartered here.” That makes the region vulnerable during the recession as companies cut costs. It also makes it hard to attract top earners.

The north-west’s productivity, employment levels and educational attainment are all below the national average. While tens of thousands now live in Manchester city centre, a building binge means prices in some areas are among the biggest fallers in the country. Redevelopment projects outside the centre, in Rochdale and Stockport, have been shelved or cut back as builders struggle to raise finance.

East Manchester, which lost almost half its jobs between 1975-85, is proving hard to turn round. It is still one of the most deprived areas in the UK, in sight of the glittering skyscrapers of the new city centre.

Hope now lies with the Abu Dhabi royal family, which bought Manchester City last year. City play at Eastlands, and the council believes the billionaires of the United Arab Emirates have big plans for the area.

“They have made it clear they were not just investing in Manchester City but the city of Manchester,” says Sir Howard, a City fan.

The double act of Sir Howard and Sir Richard – and Graham Stringer before him – is given much credit for fostering the city’s reinvention after the 1980s manufacturing slump and the IRA bomb. “They are very entrepreneurial,” says one business figure.

The city itself is staunchly Labour but never succumbed to the anti-business stance of many left-wing urban councils in the 1980s. It has also worked effectively with the other nine councils that make up Greater Manchester – Bolton, Bury, Oldham, Rochdale, Salford, Stockport, Thameside, Trafford and Wigan, some of which are run by the right-wing Conservatives or the centrist Liberal Democrats.

Rare for the UK, the 10 take some executive decisions as a group and have agreed to abide by votes where at least seven agree.

However, they did split over plans to introduce a congestion charge. In return for the levy, the first big scheme in the UK, the government would have funded big public transport improvements. To break the deadlock, the councils agreed to hold a referendum, which rejected the plan comprehensively.

Despite the fierce campaign, council leaders insist it is business as usual. That means working together to try to achieve another first – to win greater powers from Whitehall in the April budget, that would put it on track to emulate London’s political, if not economic, clout.

Copyright The Financial Times Limited 2018. All rights reserved.

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