Out of the black stuff

Tara Hamilton-Miller finds Liverpool enjoying a renaissance from its status as Capital of Culture

The energy hit me as I arrived. The sun was shining on 2008's European Capital of Culture, the streets were packed and there was live music everywhere. Credit crunch, what credit crunch? It was a Thursday afternoon but shoppers were struggling with bags as champagne corks popped at packed restaurants. This was not the Liverpool I remembered.

Neoclassical architecture gleamed - someone has finally got it. A stretch of grotty tourist tat shops in front of the station is being torn down. Workmen are drilling, painting, building; in the town centre, everyone is busy.

The train trip had been surprisingly hassle-free and, even though it was only 9am, the rest of the carriage was occupied by elderly ladies who howled with laughter all the way from Euston to Lime Street. It was like they were on drugs: they sniggered at their Délifrance baguettes, they made jokes about each other's medication and they passed round a magazine so they could cackle at a Lewis Hamilton interview.

At the Hard Days Night Hotel, the owners have tried to create what I had thought was impossible - a tasteful themed hotel. Much of it is rather nice and the Beatles memorabilia is quite subtle. I was relieved to find the bedroom relatively Fab Four-free, until I clocked the painting behind the bed. As contraception goes, sleeping under a seven-foot portrait of the Beatle that never was (Stuart Sutcliffe, who died of a brain haemorrhage at 21) is surprisingly effective.

It's a cliché of the north, but people do randomly talk to you, ask if you want a drink, what you are up to. Pub crawls happen by mistake. At the White Star pub, Bob, a guitarist in a Beatles tribute band, listed his likes: politically incorrect jokes, pets, beer, and his dislikes: people who split infinitives, and not being drunk before a gig.

Next stop was the Grapes. In the late 1990s it changed its name to the Famous Grapes. Locals protested and had the "famous" removed. It was not the first time the name had been junked. In 1987 the pub was temporarily renamed the Beautiful South, as a promotional campaign for the band. At midday in the Grapes a request for ice for a gin and tonic was declined because: "It's Beatles Day and we're flat out." Fair enough.

Perched at the bar in the Jacaranda on Slater Street was Allan Williams, the original owner of the pub and the first manager of the Beatles. He is known as the man who gave them away. A charmer, he was relating Beatles anecdotes to a couple of impressed Glaswegians. Williams has probably told these stories most days for the past 40 years. He was recounting how when the Beatles first played in the Jacaranda's basement, he made more money selling hot dogs than from the group themselves.

Money is being poured into the city and, as part of the Capital of Culture year, Liverpool has a new exhibition. "The Beat Goes On" showcases the city's musical influence from the 1940s to the present. It's worth a visit for any music fan. The organisers have managed to borrow some fantastic memorabilia: John and Yoko's "love-in" bedsheets, Billy Fury's guitar, Cilla Black's frock (with minuscule waist). There are touching recorded vox-pop memories and the obligatory press-button, interactive stuff all museums apparently have to have by law now. What makes the exhibition great, however, are portraits by the legendary Harry Goodwin, for years the Top of the Pops photographer, and early work by the fabulous, provocative snapper John Stoddart.

In honour of Beatles Day, my hotel was hosting a 12-hour, non-stop band extravaganza. Rumours were flying that Noel Gallagher was to make an appearance. He didn't, but the New Wave band A Flock of Seagulls did. It turns out that Mike Score, the Seagulls' frontman, once famous for his bizarre hairstyle, is now completely bald and wears a little back-to-front hat.

Barry "Bean" Whitwam, of the Sixties band Herman's Hermits, took to the stage. Everyone seemed to know him. The audience was aged from 18 to 80 and there was plenty of laughter. Were they all on what the morning-train gran nies were on?

It seems that Liverpool's main product nowadays is fun and entertainment. Buildings with grand entrances still have engraved in stone the names of proud mercantile businesses of the empire - the shipping companies and brokers. But they now sell pitchers of Red Bull and vodka for £9.99.

The London Carriage Works restaurant in the stylish Hope Street Hotel is an example of the new Liverpool. This boutique hotel is wonderful and can be forgiven for going over the top with dated frosted glass. On the evening I was there, the diners enjoying the locally sourced menu appeared to be native Liverpudlians - a good sign - and merriment filled the air.

How long will this continue? What happens if the money dries up? Is all this sustainable? I did not make it out of the main city centre to where there are still swaths of poverty. Michael Heseltine's International Garden Festival in 1984 was meant to help the problems of unemployment; it was a success for its five-month duration, but, as with the Glasgow Garden Festival in 1988, the Otterspool site was afterwards left derelict for many years.

The city has been given an opportunity and needs to use it carefully. It is an area with a dual identity: the old trade port and the new cultural beacon of the north-west. If Liverpool plays it right, the rejuvenation could last for years. Asked if the boom will continue, a doorman at a plush bar says: "Liverpool has been black-economy money for as long as I've known it. It will never change." A bar manager was sceptical about how the money brought in by the Capital of Culture status is being spent: "Some of the cash was forced into projects that were not needed." A few reckoned the city would have benefited from having an extra year to prepare.

As I check out from my hotel, I mutter something about the Stuart Sutcliffe passion-killer. It turns out it wasn't him - it was Pete Best, the drummer that Ringo replaced. Oh well.

This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop