An enduring affection for English Journey – a book that its author, J B Priestley, described as a “rambling but truthful account of what one man saw and heard and felt and thought during a journey through England during the autumn of the year 1933” – was one of the reasons I set out last summer to revisit the parts of the country where I have lived, and when I arrived in Newcastle on a cold January morning, the back-handed tribute he had paid to the nature of life in the north-east was in my mind. “There is, you see, something bracing about the Tyne,” he wrote. “After you have seen it, you realise that it is not for the likes of us to be sorry for ourselves.”

My memories of Northumberland are predominantly of its empty moors and long, windswept beaches, rather than the pits and slums Priestley found so oppressive, yet I was expecting to discover that his observation remained as appropriate as ever. After all, the past half-century has not been easy for the north-east. When Priestley said that the inhabitants of Gateshead lived “in a workshop that has no work for them”, the region’s old industries were in severe yet temporary decline.

Today they have disappeared altogether and the north-east is attempting to forge a new identity in the middle of one of the most severe recessions since the slump that coincided with Priestley’s visit.

The three years that my family spent in Northumberland came between those two lows, and before an equally savage period of retrenchment in the 1980s. I had spent the first two years of my life in Essex, where I was born, but in 1970 my father got a job in Southampton working for a company called the Industrial and Commercial Finance Corporation or ICFC, which was a kind of national investment fund, set up by the clearing banks and the Bank of England at the end of the Second World War. In 1972 he was appointed to run the Newcastle office. ICFC’s aim was to provide long-term loans and “risk capital” to small- and medium-sized businesses that had no access to capital funding, and it placed great emphasis on its network of regional offices. In 1974, it ran a national advertising campaign with the strapline “A Man in the Field Is Worth Two in the City”, and in Newcastle it illustrated the ad with a photograph of my father standing in front of one of the city’s best-known landmarks.

Grey’s Monument stands in the middle of Grainger Town, the elegant city centre designed by a speculative builder in the 1830s as Newcastle entered its period of greatest prosperity. In 1722, Daniel Defoe had anticipated Priestley’s lament for the lost souls of the north-east when he bemoaned Newcastle’s “prodigious number” of poor people, but by the end of the 18th century the city had begun to change. The Literary and Philosophical Society, the city’s celebrated library, was founded in 1793 and moved into a listed building in 1825. In 1830 a local aristocrat named Earl Grey became prime minister. During his four years in office, he oversaw the abolition of slavery in the British empire and implemented the Great Reform Act, which scrapped the “rotten boroughs” and ensured parliamentary representation for the rapidly expanding cities of industrialised Britain. According to the inscription on the pedestal of his statue, Earl Grey “was the constant advocate of peace, and the fearless and consistent champion of civil and religious liberty”. The advert no doubt was intended to evoke favourable comparisons between the noble lord and the lean, dark-suited young man with the fashionably florid sideburns staring down into the camera.

I didn’t remember Grey’s Monument, but I knew it second-hand from the photograph that had found its way into a family album, and it seemed an obvious starting point for my attempt to explore a city I hardly knew. As I made my way down Grainger Street from Central Station, I passed Bigg Market, centre of the nightlife for which Newcastle has become so popular, and reached a plaque that offered a more sober appraisal of the city’s nature. I couldn’t unravel the logic of the legend in the central panel inlaid in the pavement – “The Past Is My Present To Your Future”, it said – but
I recognised the aptness of the two-word prose poems in the squares placed around it: “Of Now”, “Of Then”, “Of Women”, “Of Men”, “Of Stone”, “Of Steel”.

Until New Year, the protesters of the Occupy Newcastle movement had been encamped beneath Grey’s Monument, but the tents had gone and the square was empty apart from a scattering of weekday shoppers. The street that curled downhill towards the river was also named after Earl Grey, and it is often described as one of England’s finest. “As for the curve of Grey Street, I shall never forget seeing it to perfection, traffic-less on a misty Sunday morning,” John Betjeman said. “Not even Regent Street, even old Regent Street London, can compare with that descending subtle curve.” Priestley had been less impressed; he conceded that the centre of Newcastle had “a certain sombre dignity”, but it was “chiefly built of a stone that has turned almost a dead black”, and on a wet November evening in 1933, “the whole city seemed a black steaming mass”.

Evidently it had been cleaned since then. The stone of Grainger Town was a soft, pale gold in the morning sunlight, though its elegant streets and buildings sit within a city shaped by robust and unsentimental planning. In the 19th century, a railway viaduct was driven through the middle of the medieval castle that gave the city its name, leaving the remnants divided by the tracks, and recently motorways have been pushed through the centre. The bridges and viaducts that brace the city against the slope as it falls away towards the Tyne were another reminder that Newcastle is both the workshop and the showroom of the Industrial Revolution. Robert Stephenson built the early steam engine known as the Rocket in a factory in Forth Street, and he also built the bridge that provides a dramatic entrance to those arriving from the south. Earlier in the day, I had been sitting on the train, listening to a trio of Christian missionaries discussing a project in Malawi as Durham flickered past. Neither the sudden apparition of The Angel of the North nor the sight of a scrapyard stacked with cars and lorries had alerted me to our imminent arrival in the north-east’s pre-eminent city, and I was surprised when the train emerged from a cutting and I found myself looking down on the grey waters of the Tyne.

Priestley was particularly dismissive of Gates­head, Newcastle’s sister city, which lies on the south bank of the Tyne: he claimed that it had “fewer public buildings of any importance than any town of its size in the country”, but that changed after Lottery funds became available at the end of the 20th century. As we crossed the High Level Bridge, I caught a glimpse of the three landmark structures that have opened on the south bank of the Tyne in the past ten years, and when I reached the bottom of the hill on foot and passed beneath the huge stone ramparts of the Tyne Bridge I saw them from the level of the river. The linked chain of steel and glass mounds that make up Norman Foster’s Sage centre for the arts was directly opposite, and the Baltic Centre for Contemporary Art occupied a converted grain warehouse further downstream. The final part of Gateshead’s trio of grands projets was supplied by the tilted hemispheres of the Millennium Bridge, which provide a pedestrian link between Newcastle and Gateshead and complete a renovated riverscape to match the splendour of Grainger Town.

The development of the Quayside on the Newcastle bank was less dramatic, though the man who had overseen it maintained it was no less  complete. Alastair Balls is a quietly spoken 68-year-old Scotsman who began his career in Whitehall and rose to the post of senior economic adviser to the Treasury. While he was in London, he had met a delegation of miners who came south with “flat caps and begging bowls” in the late 1970s, and he remembered attending a funeral of an uncle at a Methodist chapel in south Tyneside where the women sat on one side and the men on the other.

Yet even though the north-east seemed a “cultural throwback” that did not put him off, after 15 years in London he decided he wanted to live somewhere “a bit grittier”, and he moved to Newcastle in 1983 to become northern regional director of the Transport and Environment departments.
Shortly afterwards, Margaret Thatcher visited a shipyard in the north-east and the workers turned their backs on her. “They still believed that they could build the best ships in the world,” Balls said, when I met him in the pub beside the Millennium Bridge on the Quayside. “They said they needed subsidy – but they could still build them. Unfortunately, it wasn’t true. No one wanted to buy them.”

Balls believes that two events galvanised the region: the opening of the Metrocentre in Gateshead, which is usually said to be Europe's largest shopping centre, and Nissan’s decision to build a car plant in Sunderland. The car plant may be located on Wearside but Geordies claim a stake in it as well, and it “acted as an enormous hike”. Production started in 1986 – the same year that the first phases of the Metrocentre opened – and a year later, Balls became director of the newly created Tyne and Wear Development Corporation. The regeneration of the Quayside was his main task. The wooden staves of the jetty were rotten and the adjacent warehouses had been used to store asbestos. Treacherous underfoot, stacked with carcinogenic debris and unused by shipping, it had fallen into “total dereliction”. It is now a kind of “urban park” and an integral part of the city, yet some say that the cultural and residential regeneration of the Tyne will not count for much unless its industrial sites are also revived.

After I left the Quayside, I travelled a mile downriver to the offices of a company called Shepherd Offshore in the old naval yard in the Walker area of the city. The naval yard once belonged to Armstrong Whitworth, and it was one of the most significant warship manufacturers in the world. “Armstrong brought the world vessels, and then artillery, and then put the two together,” Andy Williamson, Shepherd Offshore’s director of business development, told me as we sat in the boardroom looking out across the dock to the slow-moving water of the Tyne. “Basically, you had ships and guns and then guns on ships.”

Williamson used to work for the regional development agency, where he campaigned to keep the yards downriver zoned for industrial use, and his commitment to the task has continued since he joined Shepherd Offshore. The company is owned and run by two brothers called Bruce and Freddy Shepherd, who are part of an entrepreneurial working-class clan from the East End of Newcastle. Their father, who was a lorry driver, set up a transport business and acquired the family’s first riverside property. When the North Sea oil and gas industry developed in the 1970s, the Shepherds established a base for manufacturing and servicing offshore platforms, and as shipbuilding declined, they bought up more and more vacant land on the north bank of the Tyne.

Some people regard the Shepherds with unconcealed distaste, not least because of their tenure of Newcastle United Football Club. They owned the club in conjunction with the family of Sir John Hall, the property developer who built the Metrocentre, and had a plan to unite the local football, rugby, basketball and ice hockey teams in an entity that would exemplify the spirit of the “Geordie nation”. Yet Hall’s grandiloquent vision for the Newcastle Sporting Group did not catch the local imagination, and when he failed to get permission for an all-purpose stadium, he began to dispose of the parts of his sporting franchise. The Hall family retained a stake in the football club, but in 1997 Freddy Shepherd became chairman and John Hall passed on his shares to his son, Douglas. A year later, Freddy Shepherd and Douglas Hall suffered the embarrassment of being caught on a tape in a Spanish brothel by the News of the World’s “fake sheikh”, Mazher Mahmood, describing Newcastle women as “dogs” and mocking the club’s supporters for overpaying for its merchandise. The Shepherds have also been accused of mismanaging the club and plundering it for profit. After the businessman Mike Ashley bought Newcastle United from the Halls and the Shepherds in 2007, newspapers reported that the families had made £95.7m and £50.1m respectively on their investments, partly by virtue of being in charge when football clubs of Newcastle’s profile changed from local concerns to publicly listed companies.

Yet there is no shortage of people prepared to speak up for the Halls and Shepherds. One local businessman told me that John Hall’s initiative had inspired a new breed of entrepreneurs in the north-east, and Andy Williamson was naturally inclined to defend his employers, insisting that they are “local boys done good” who have reinvested heavily in their community. He said the Shepherds were the first to recognise the potential of the old shipyards on the Tyne. They bought the naval yard in 1986 and have since turned it into an industrial estate called the Offshore Technology Park, with tenants involved in oil and gas and deep-sea exploration, such as Wellstream and Duco. They have also bought up other sites downstream.

Williamson maintained that Shepherd Offshore and its “anchor tenants” have invested £120m in manufacturing capacity and new infrastructure on the north bank of the Tyne in the past 12 months alone – a figure that allows it to claim it is performing the “pump-priming role” usually taken by central governments.

He said he would let me see for myself, and we climbed into a Land Rover and set off past a ship loading up on the dock, where 250-tonne reels of coloured cable were stacked like giant spools of thread. The first sites we passed were still derelict, but work has begun on the Neptune shipyard downriver, which Shepherd Offshore bought in 2008. So far, it has invested £38m on renovating it, and two partially completed warehouses lie beyond its gates. The first is leased to an American company that had intended to use it as a turbine blade manufacturing plant until new owners put the plan on hold, and the second to a British firm called Bridon International, which is establishing a plant manufacturing steel and wire rope.

We passed another ship moored beside a new concrete “load-out pad” and stopped beside the dry dock where the Mauretania, which once held the record for the fastest Atlantic crossing, had been built; it was 217 metres long, 35 metres wide and 11 metres deep and it looked like an immense, drained swimming pool.

Further down the dock, a bumpy, mud-strewn path wound between the mountains of earth that have been collected for the task of filling in the other three dry docks in the Neptune yard. When the work is completed and Neptune’s 800-metre dock is added to the 900 metres of the Offshore Technology Park, the Shepherds’ holdings on the north bank of the Tyne will constitute what Williamson calls a major UK manufacturing supply base. “You’ve got a working river again – and if you look at where it was in the 1980s . . .”

The Tyne’s best-known shipyard, which lay at the end of the Shepherds’ holdings, was a reminder of the fate that had been averted. My father went to a ship launch at the Swan Hunter yard soon after he arrived in Newcastle but it was coming to the end of its productive life. After it was privatised in 1987, it was used as a base for offshore oil and gas platforms, but it couldn’t beat the competition from the Far East, and in April 2007 its cranes and floating docks were sold to one of India’s largest private-sector shipbuilders. The buildings and equipment beyond the fence that ringed the yard adjoining the eastern edge of Shepherd Offshore’s holding were demolished and the land was bought by the local council. All that is left of Swan Hunter today is a small company that provides engineering and design services from an office on the site.

The rows of terraced housing that abutted the retaining walls on the edge of the docks were a reminder of the intimate relationship that used to exist between local people and the shipyards, but Williamson saw no reason to despair. “We go to crisis meetings about the region losing its identity, but in the meantime we plough on and we manage to get quite a lot done,” he told me. He believes that the Tyne might one day generate work for 10,000 people – a fraction of the number it once employed, but nonetheless a “rising from the ashes” that has no parallel in the industrial heartlands of the Midlands where he was born. Yet its success is far from guaranteed: offshore wind could be the “biggest game-changer” that UK manufacturing has experienced in the past 50 years, but it will require central intervention, and since the coalition government announced in 2010 that it was scrapping the regional development agencies there has been little indication of a co-ordinated plan. “There is cause for concern, but we put our best foot forward,” Williamson said. “Build it and they will come. It’s been said before.”

The Shepherds’ acquisitions are not limited to properties on the Tyne. In 1993, they bought Mitford Hall, the 5,000-acre estate near the county town of Morpeth that had belonged to the Mitford family since the 11th century. In 2009, they confirmed their place among the city’s new aristocracy
by acquiring La Sagesse, a site in the Newcastle suburb of Jesmond that includes the listed home of Charles Mitchell, who began shipbuilding at the naval yard in Walker in 1852.

Yet the influence of Northumberland’s old families has not entirely faded, as the event that marked the beginning of the financial crisis made plain. It used to be said that most of Northumberland was owned by the Forestry Commission, the Duke of Northumberland and a handful of aristocratic families, including the Ridleys. Matthew White Ridley, the 4th Viscount Ridley, who died last month, was the elder brother of the late Conservative cabinet minister Nicholas Ridley. The 4th Viscount Ridley was chairman of Northumberland County Council between 1967 and 1979 and subsequently served as Lord Steward of the Household – an important role in the royal family.

His son, the science writer Matt Ridley, who is now the 5th Viscount Ridley, inherited the title and the family estate, Blagdon Hall, which lies ten miles north of Newcastle. By a less direct mechanism, he also inherited some of his father’s responsibilities for local concerns. The 4th Viscount was chairman of the Newcastle-based bank Northern Rock between 1988 and 1993 and his son was its non-executive chairman from 2004 to 2007, a time when it was pursuing what a Treasury select committee described as a “high-risk” business model that depended on raising funds from wholesale markets – essentially, large-scale interbank transactions. When the markets froze in 2007, it could not raise the money it needed to meet its short-term obligations and depositors rushed to withdraw their funds, making Northern Rock the first UK financial house in 150 years to suffer a “bank run”.

Nicholas Ridley was an outspoken advocate of the free market and Matt Ridley has always been equally sceptical of the value of regu­lation: he has said that “government is the problem not the solution” and described it as “a self-seeking flea on the backs of the more productive people of this world”. Yet, under his chairmanship, Northern Rock was forced to ask the Treasury for emergency credit. It was subsequently nationalised and split in two. The Treasury has kept control of the so-called bad bank, but in November last year it sold the “good bank” to Virgin Money for £747m – a loss to the taxpayer of at least £400m.

Matt Ridley declined to speak to me and Virgin Money would not talk about Northern Rock’s recent past. Alastair Balls, who is chairman of Northern Rock Foundation, the bank’s charitable arm, which had a great deal of money to dispense in the boom years, said they were right not to drag it up again, though others told me he was overestimating the blow to local pride constituted by its demise. Balls said that Northern Rock’s collapse had played out like “a Shakespearean tragedy”, and called it a “great enterprise which had got into difficulties, partly through reasons of its own making and partly for reasons beyond its control”, which seemed a generous interpretation.

A select committee report criticised Matt Ridley for failing “to act as an effective restraining force on the strategy of the executive members”, and he resigned from Northern Rock in October 2007. Yet his family’s wealth and connections ensure that he remains a powerful figure in Northumberland. Blagdon Hall, which has been in the White Ridley family since 1698, includes tenanted farms, residential and commercial properties and two coal mines, one of which figures in a new scheme intended to carry the process of “cultural regeneration” that began in Gateshead further north.

The architect Charles Jencks is using the spoil from the Shotton surface mine to create a “recumbent female figure” 34 metres high and 400 metres long. It will be the “world’s largest human form carved into the landscape”, and it will form the centrepiece of a 19-hectare “landform public park”, called Northumberlandia, that will bridge the division between “the rolling countryside of mid-Northumberland and the urban areas of south-east Northumberland and Newcastle”.

Northumberland’s premier aristocrats have produced a piece of landscape architecture of their own. The Alnwick Garden is a complex of formal gardens built around a water cascade on a 17-hectare site next to Alnwick Castle, ancestral home of the Duke of Northumberland. That Alnwick Castle is now best known as the stand-in for Hogwarts in the Harry Potter films is testament to the faintly fantastical nature of life in rural Northumberland. Another of the family’s properties is Syon Park, near Kew, the last privately owned stately home in London.

The Alnwick Garden has been called “the Versailles of the north” and it is said to be the largest and most expensive garden created in Britain since the Second World War. I walked round it with my wife and son two years ago when we were driving from Edinburgh to London, and I didn’t go back during this trip north. Instead, I caught the train to Morpeth, where I lived as a child.

The county town of Northumberland lies 21 miles north of Newcastle, halfway between Alnwick Castle and Blagdon Hall and two miles east of Mitford Hall. We moved there at short notice, and for a year we lived in a house on a 1950s estate near the station. A board on the far side of the road listed the exotic trees that had been planted in the adjoining arboretum and another listed the names of the streets beyond the entrance to the estate, but the difference between the worlds they represented was not as extreme as it initially seemed. The tarmac streets that wound past the houses on the estate seemed to follow the contours of the land as naturally as a trodden path winding through a wood.

We left the house when I was six and I had been back only once but, to my surprise, I found it without hesitation. The house was bigger than I remembered: it had two sitting rooms facing the unfenced front garden, and the woman who answered the door said they had turned the garage into an extra flat for her parents.

An elderly Indian man leaning on a stick and smoking a cigarette emerged from the house next door as I crossed the footbridge above the stream at the bottom of the road. It was market day and there were roadworks in the high street; a single lane of traffic was filtering past a small collection of stalls set up in a square. A woman selling home-made fudge told me that she remembered the market when it filled two car parks by the river, but “the lamb man” on the stall opposite had a longer perspective. Jimmy Bell’s family had been bringing sheep into Morpeth from their farm in East Wingate, ten miles to the north-west, for the past 400 years, and he saw no reason to bemoan a temporary dip in fortunes. Twelve years ago he began butchering his lambs and selling the meat directly to the public, but otherwise little had changed.

Our second house in Morpeth stood in a sloping garden halfway up a street called Kings Avenue, five minutes’ walk beyond the market. It was bigger and older than the other house, a large, square Victorian building three storeys high. An unframed canvas was propped on an easel in the sitting room and there were flowerpots in the conservatory facing the garden where I remember playing as a child. The solidity of its pale sandstone walls reminded me of the manor houses and farmhouses that some of my family’s friends used to rent on the rural estates around Morpeth and, indirectly, of the moors and beaches that many people still regard as Northumberland’s greatest prize.

On my way back to the station, I stopped on the lichen-encrusted bridge above the River Wansbeck, which burst its banks in 2008 and flooded the town. The water was low enough to show the footpaths on either side, but the branches pinned against the piers of the bridge testified to the force of a current that seemed to grow stronger as it swept past my first primary school, Goose Hill, which lay beyond a patch of empty land on the far bank. There was a solicitors’ firm at the end of the bridge called Wholley Goodings and a Union Jack was flying from one of the houses upstream.

My father would have stayed longer in Newcastle, but in 1975 he was persuaded to accept a job running a bigger office in Liverpool, and 25 years later ICFC – or 3i, as it had become – left as well. It had floated on the stock market in 1994, and once it began pursuing the quicker, larger returns its institutional shareholders required, it dismantled its network of regional offices. In effect, it had quit the field for the City, and my father was not alone in regretting the way it had abandoned its original remit. Lucy Armstrong, who went to work for 3i in Newcastle when she left university in 1989, said that its departure was seen as a bad sign at the time and is still regretted now. “People still talk about it – they say we want the old 3i back, or something like it,” she said. “That’s something you’ll hear a lot in this town.”

Armstrong left 3i in 1995, coincidentally the year my father retired, but she still lives in Newcastle, where she is chief executive of the Alchemists, a kind of consultancy that provides advice and support for “fast-growing, entrepreneurial companies that have reached a critical point in their development”. She is also director of the Confederation of British Industry’s council on small- and medium-sized enterprises – or private and family-owned businesses, as she prefers to call them. She believes that SMEs will play a vital role in driving the UK out of recession. “Crudely put, the government’s bust, the consumer’s bust, and only about 30 per cent of the FTSE-100 companies’ turnover is in the UK, so they’re not really British businesses,” she says. “So it has to be private and family businesses.”

This is one area where the north-east has an advantage: because there are now few public limited companies that maintain headquarters outside the south-east, the region is dominated by SMEs. That many of these are manufacturing and hi-tech engineering firms also counts in the north-east’s favour. Domestic demand is so weak that growth will be export-led; and it is not only thanks to Nissan that the north-east is the only region of the UK to boast a positive trade balance.

Others believe that the future will depend on kibs – knowledge-intensive businesses – in the “creative-media” field. Charlie Hoult, scion of a family that for four generations has run a business from a ten-acre complex of warehouses in Ouseburn called Hoults Yard, believes that Newcastle embodies the modish concept of “Ideopolis”, a city that requires no more than an airport, a university and good broadband connections to prosper. Hoults Yard is a case in point. Charlie was running a public relations business in London when he got “spat out by the financial crisis” of 2008, and came home to take on the family firm. Hoults Yard has been in the family since 1917. It was originally the base for a removals company and a pottery business set up by Charlie Hoult’s great-grandfather, but the pottery shut down in 1963 and 20 years later Pickfords absorbed the removals firm. It was Charlie’s father who had to find a use for “a large draughty space in a dodgy part of town”. He started letting units to photographers who placed more emphasis on heat than light and appreciated the site’s industrial character. When Charlie took over in 2009, he continued the process of converting the site’s warehouses into offices and studios, though he says he has been more forceful about presenting Hoults Yard as a “creative village” rather than a business park.

Alastair Balls has similar ambitions for his adopted town. When he arrived in Newcastle “people were still talking about the grand old days when there were ships floating down the Tyne and everyone turned out for the football match”. He believed that a “cultural transformation” was required. He was particularly concerned that Newcastle’s universities – an essential component of the Ideopolis – were “punching below their weight”, so he helped set up an educational and scientific charity, the Centre for Life, which now occupies a campus near the railway station designed by the ubiquitous Terry Farrell. Matt Ridley, who knows a great deal more about life sciences than he does about finance, was the founding chairman. The Centre for Life is a “centre of excellence” in the fields of genetics and stem-cell science. Its success is consistent with Newcastle’s determination to promote itself as a student town. In term time, students account for 5 per cent of the local population, and it is acknowledged that Newcastle must do more to retain graduates who are educated in the city.

It also has to provide more opportunities for its indigenous population. One recent growth area has exploited the distinctive Geordie accent. Priestley called it a “most barbarous, monotonous and irritating twang”, but it seems that I am far from alone in finding it easy on the ear, if the preponderance of call centres is any guide. Today, an estimated 60,000 people are employed in call centres in the north-east, or one in 20 of the local workforce. And yet few will be surprised by the conclusion of a report, published last year by Durham University, that such work is perceived as a “stopgap” at best, poorly paid and with little chance of advancement. However, even jobs like these are under threat.

In the past year, unemployment in the north-east has risen by 25 per cent, outstripping not only the relatively modest increases in London and the south-east but those in other parts of the north as well. House prices – that indispensable guide to the nation’s emotional and financial health, at least in the middle-class mind – confirm the north-east’s predicament. According to the Land Registry, house prices rose by 2.8 per cent in London in 2011 but in the north-east they fell by 7.1 per cent, making it the only region in the country where the average house costs less than £100,000. There is worse still to come for a region that is heavily dependent on public-sector employment: 94 per cent of the departmental spending cuts and 88 per cent of benefit reductions the government has announced have not yet been implemented, but already people are saying that things are worse than they have ever known them.

Ken Milor, who lives on the landmark Byker estate in the deprived East End of Newcastle from which the Shepherds originally came, has been unemployed for three years and he has had only one job interview in that time. Milor grew up in the old back-to-back houses that were demolished in the 1970s to make way for the estate, designed by the Swedish architect Ralph Erskine, and he still lives close to his old home. He began his career with a three-year apprenticeship at Swan Hunter, but since injuring his back at the age of 25 while working as a gardener, he has had paid work intermittently. In 1999, he launched the Millennium Jobs Scheme with the former footballer Peter Beardsley. The aim was to get 2,000 people into work, and he was the last to get a job. He worked as an events organiser for a year, and in 2001 he began volunteering for a project helping asylum-seekers.

The wider north-east has a relatively small black and ethnic-minority population compared to the rest of England, but Newcastle conforms with national trends: its population is 87.8 per cent white, on a par with the national average of 87.5 cent. A local councillor told me that the children at Byker Primary School speak 35 different languages. Nonetheless, Milor said that the East End did not have a “particularly diverse community” ten years ago and, given the way that asylum-seekers and refugees were characterised in the press, he had wanted to do his bit to ensure that the north-east’s reputation for hospitality was preserved.

Over the next eight years, he graduated to the role of principal project worker. “I was really proud of what I achieved,” he said when I met him in the church hall that houses the Byker Community Association. “I was just a lad from Byker. I didn’t have any qualifications, but I had a passion for helping, and I worked my way up.” In 2009, he was promised a three-year contract to continue his work but the funds ran out. He is still bitter about the way he was treated: “That was it – here’s the door, turn the light off on your way out. It wasn’t good.”

With his long record of voluntary work, however, Milor soon found himself running the Byker Community Association. “This is Cameron’s idea of the big society, and we’ve been doing it for years. The country couldn’t exist without it. I do 11-hour shifts here – I’ve got voluntary work coming out of my ears – but I can’t find paid work to save my life. I despise Thatcherism and its legacy, but this is worse. It’s reminiscent of the 1920s. It’s quite shocking.

The division between rich and poor is so extreme, and they pick on the weakest first. We’ve always prided ourselves on giving, and our government prides itself on taking from the most vulnerable. That’s Cameron’s Britain. I hope he can sleep at night. Because I can’t.”

I wanted to see the neighbourhood where he had spent his life, so we left the community centre and walked down the hill to the “Byker Wall” – the unbroken line of flats that forms the northern edge of the estate. Because it was designed partly to shield the interior from the noise and fumes from the traffic on the A193, its façade is pierced by only a few windows, but on the inside it is broken up by balconies and by the red, green and blue wooden cladding that colour-codes the estate, softening the assemblage of brick walls and concrete walkways. Byker was one of the products of T Dan Smith’s vision of turning Newcastle into the “Brasilia of the north”. Smith was the Labour leader of Newcastle City Council who went to prison in 1974 for corruption. One of the legacies of his rule was the enduring distrust of politicians and political structures that prompted the people of the north-east to reject John Prescott’s plan for a regional assembly in such convincing numbers in 2004. Yet Smith’s desire to clear the city’s slums and replace them with something better resulted in the striking architecture of places such as Byker, which was granted Grade II listed status in 2007.

Milor was pleased that Byker’s merits have been recognised, though he was dismissive of the “Perrier and croissant” lifestyle of the architect who proposed the listing and lived briefly in a flat in the Byker Wall. His attitude to the estate as a whole was no less ambivalent. He regretted the loss of the neighbourhood that he knew as a child and disliked the high-handed way the changes had been made, but welcomed the improvements in heating and sanitation, and recognised the wisdom of replacing the old back-to-back houses, which ran up and down the hill, with flats that run across the slope and command wide views of the city and the Tyne below. The taxi driver who took me to Byker said the houses on St Michael’s Mount were in the best location in the city, and the renovated garden of the church below the community centre enjoys the same commanding views. A circular timeline engraved on a sundial on the terrace identified landmarks in the city and the year in which they entered its history, but my eye was drawn inexorably to the shimmering trail of the Tyne and the interlocking loops, curves and ruled lines of the bridges that tie the cities of Newcastle and Gateshead together.

Milor said the view gave him goosebumps and that it was the Tyne Bridge that meant the most to him, as an old-school Geordie. Its semi-circular form and the phantom shapes of the great ships that had slipped into the water beneath it are an uncompromising demonstration of the engineering prowess that made Newcastle rich. By comparison, the newer structures seem fragile and meretricious, for they were generated during the debt-fuelled boom of the first part of the millenium, and are devoted to culture and leisure. But there is no doubt that Newcastle has undergone a transformation. The difficulties that lie ahead are as great as any it has faced, and yet the city I found seemed a brighter and stronger place than the one my father would have known, let alone the one that J B Priestley discovered.

Edward Platt is a contributing writer for the New Statesman. “City of Abraham”, his book about Hebron, will be published by Picador in September