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Simon Topman, right, the owner and chief executive of Acme Whistles, is an advocate for the Birmingham region’s economy. (Doug Saunders/The Globe and Mail)
Simon Topman, right, the owner and chief executive of Acme Whistles, is an advocate for the Birmingham region’s economy. (Doug Saunders/The Globe and Mail)

Broken Europe

A furtive industrial evolution gives Britain hope for economic recovery Add to ...

Colin Knoght's trip to work takes him through a forest of neatly treed high-rise towers and crowds of jobless young men lingering in courtyards, a blank urban expanse that has been crushed by the economic downturn and now has Britain's highest unemployment rate: Thirty-eight per cent of adults in this Birmingham district of Aston are out of work.

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He turns a corner, steps through a green wooden door in a small red-brick building and enters an anachronism: a bustling, noisy Victorian factory, the Acme Whistles works, which each day turns out 1,500 Acme Thunderer whistles, used by NHL referees and police the world over, and 10,000 other small noisemakers.

Two years ago, his job on the electroplating line seemed like a relic from a distant past. Now, as Britain struggles to recover from a financial collapse that could wound its economy for a decade, it increasingly looks like part of the solution.

Acme is a small, traditional enterprise, but it also happens to be this district's second-largest employer at the moment, even though only 68 people work here. Mr. Knoght became one of them in November, after spending 18 months unemployed; most people in his neighbourhood have been jobless for longer. People like him, mostly male and high-school educated, are the core victims of Britain's own version of the European calamity.

While other countries have seen their economies deflated in housing collapses or decapitated in debt explosions, Britain's has been hollowed out. The crisis has hit Britain's former industrial cities harder than anywhere else, obliterating the service-industry jobs that held these places aloft during the 15-year boom, and the country is slowly realizing that it is playing a price for the near-absence of a manufacturing economy.

But just as officials are awakening to the need for jobs based on inventing, making and exporting physical things rather than financial products, the government agencies that might have led such a transformation are having the legs yanked from beneath them.

"For 20 years, the government told the world that people like me, manufacturers, have no future in England," says Simon Topman, the owner and chief executive of Acme Whistles and an advocate for this blighted region's economy. "That meant that nobody wanted to invest in us; nobody wanted to learn the skills to work here; no politician tried to sell us. And now that they're talking about exporting our way out of the recession, they're realizing they could have used us all along."

Throughout most of the 19th and 20th centuries, this whistle factory was a small point in a vast ocean of industry stretching to the horizon in every direction, the plumes of dense smoke spilling from thousands of mills and foundries leading this region to be called the Black Country. Birmingham was the centre of Britain's industrial miracle, its steel and cars exported around the world.

Then, during the 1980s, when Britain led the Western world in shifting from an economy based on manufacture and export to one based on knowledge, finance and services, places like Birmingham were devastated, their industrial districts turned into wastelands, and the unemployment rates were much higher.

But Birmingham had an impressive post-industrial recovering beginning in the 1990s, when the Labour governments of Tony Blair and Gordon Brown poured billions into urban rehabilitation. Birmingham became a centre for university-led business, and a regional cultural hub, its thriving downtown becoming a second capital of southern England.

There was a problem, though, that is only becoming apparent now: Eighty-five per cent of the employment created during that recovery took the form of government jobs, jobs in privatized, former government sectors, or jobs in service industries that provided for government. At its heart, Birmingham didn't have an economy of its own - its boom was mostly just poor service jobs and government spending.

"When I was a kid, everyone around here had jobs in factories, but now if you get anything it's mainly part-time work like cleaning - that's what my wife does," says Mr. Knoght, 47, the new whistle-factory employee. "I thought I'd never find a job like this."

Birmingham's unemployment rate is now the highest of any British city, at 10.8 per cent (and 15.4 per cent for men), which means that about 50,000 employable people in the city are without work.

The green shoots of recovery here will be stomped out in the autumn, though, as Prime Minister David Cameron launches drastic government spending cutbacks in an effort to reduce Britain's 13-per-cent deficit.

Birmingham, with its government-driven revival, is projected to face the country's largest public-sector job cuts, with around 13,000 jobs disappearing at exactly the wrong time for its beleaguered local economy.

"It is just a terrible time to have this happen, at exactly the moment when government is needed to provide the basis for a genuine industrial recovery," says Sir Albert Bore, the district's Labour Party councillor. "We can't begin to get on our feet when the training and business-development programs that could help us are being scrapped left and right."

That double blow has awoken many British observers to deeper problems in the country's economic structure, and has led to a national call for a renewed manufacturing economy.

The idea is a core plank of the Conservative-Liberal government of Mr. Cameron. He built his election campaign around a proposal, authored by the British inventor and vacuum-cleaner magnate James Dyson, to resurrect the industrial basis of Britain's economy.

Mr. Dyson's plan, boosted by the export potential of a weak pound, would shift the secondary education system to one oriented toward engineering and entrepreneurship, promote investment in manufacturing, boost government spending on research and provide government support for start-ups, especially in high-tech areas.

In his emergency budget last month, Mr. Cameron pledged to look into tax credits and other breaks for high-tech manufacturing start-ups. But the broader austerity plans contained in that budget could swamp those proposals, many here fear.

"Regions like this have been knocked around something awful, and just as we're seeing demand start to return, government spending is about to hit the buffers," says Mr. Topman, the factory owner.

Follow on Twitter: @dougsaunders

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