SHEFFIELD, England – Sheffield knows all about cuts — and no one knows better than Philip Wright.

A scissors manufacturer, he remembers this city at the height of its steel-making glory, when Sheffield’s furnaces and factories produced ships and tools and cutlery for the dinner tables of the world.

Additional Photos

A man walks past an empty shop in a financially stalled redevelopment project in Sheffield, England, which now lets out shops left empty to local community artists. The Associated Press

The huge steelworks are mostly gone now, like so much British industry over the past few decades, the victim of international competition, changing technology and governments with other priorities.

“The city at night used to be alight,” said Wright, whose tiny factory is a link to Sheffield’s past — and, he hopes, a part of its future.

That dream is under threat from deep government spending cuts to be unveiled Wednesday that many fear will once again crush cities in England’s traditional industrial belt, a generation after they were laid low by former Prime Minister Margaret Thatcher’s severe brand of capitalism.

Sheffield lost 70,000 jobs between 1979 and 1987, according to the local government — a quarter of the city’s total. The decline in steel-making was compounded by the closure of nearby coal mines in the wake of Thatcher’s war with the unions.

“When Maggie Thatcher was in she brought us to our knees,” said retiree Doreen Treweek, 70. “We really struggled. And now I’m really proud, because it’s risen from the ashes.”

With grit and determination and dollops of public investment, Sheffield has remade itself, forging a postindustrial economy from a mix of high-tech businesses, the service sector, tourism and education. Now many in this city of 500,000 — as in other cities across Britain — are worried that the spending cuts could derail that recovery.

Recession-battered Britain faces shrinking tax revenue and a growing welfare bill, and has spent billions bailing out indebted banks.

On Wednesday, Treasury chief George Osborne will announce more than $128 billion in cuts he says are necessary to rein in Britain’s 156-billion-pound deficit and reduce its huge debt.

Prime Minister David Cameron’s center-right coalition government took office in May and has already announced a raft of painful measures, including welfare cuts, a hike in the goods and services tax and a rise in the retirement age.

In the next stage of cuts, government ministries will have their budgets reduced by up to 25 percent over four years — far more than any British administration since World War II has attempted, even Thatcher’s.

“I wish there was another way. I wish there was an easier way. But I tell you: There is no other responsible way,” Cameron told his Conservative Party conference earlier this month.

As many as 600,000 public sector jobs expect to be eliminated, on top of hundreds of thousands of private sector positions already lost in the recession. The government hopes that as the economy grows, new private sector jobs will fill the gap.

But some economists say sudden cuts could tip Britain’s fragile economy back into recession. The OECD, an international club of developed economies, has warned against rapid cuts, and the U.S. government wants other countries to continue stimulus programs aimed at encouraging spending.

Christopher Pissarides, joint winner of this year’s Nobel Prize in economics, said the cuts are “too much too quickly.”

“If you do it suddenly, lots of workers might lose their jobs and then you have a problem of placing all of them in new jobs,” said Pissarides, who teaches at the London School of Economics. “If you do it gradually … people may have found new jobs by the time others lose theirs.”

Anger and worry are simmering in Sheffield, 170 miles north of London, where civic regeneration is a source of local pride.

Downtown Sheffield has been transformed in the last decade. The once-grimy area around the grand Victorian town hall is busy with shoppers and dotted with pleasant new squares and public spaces.

But the impact of the recession is visible. Several streets of shops were emptied to make way for a new retail development that is now in limbo. The empty storefronts have been filled with work by local artists and designers to make the area look less bleak.

Worse may be coming. A third of Sheffield’s workers are employed in government, education and health care, and many private companies rely on public-sector contracts.

The local council has already sent notices to 8,500 city hall staff warning they may face reductions in benefits or hours — or be laid off.

Meanwhile private businesses — including a reduced but still significant steel sector — face shrinking government support at a time when credit crunch-squeezed banks remain reluctant to lend.

The city celebrated when the previous Labour government promised an 80 million pound loan to Sheffield Forgemasters to make parts for nuclear power plants — a blend of traditional steelmaking and high-tech engineering that would have created 180 jobs. The new Conservative-led government has canceled the loan.

Small businesses like Wright’s scissors factory are clinging on, and hoping. Founded in 1902, Ernest Wright and Son had 65 employees by the 1970s. Now it has six, and is one of the last industrial businesses left in an area of brick warehouses and factories being remade into trendy city apartments.

“I knew there was going to be a recession, but I didn’t know it was going to be as bad as it was,” said Wright’s son Nick, who plans to take over the business when his father retires next year. “Our order book just plummeted.

“We’ve struggled like there’s no tomorrow and we’re that close, still, to going to the wall.”

But he is determined to carry on by combining the company’s Sheffield heritage with modern marketing and online sales.

“There’s a passion about the cutlery trade,” he said. “It gets into your blood.”

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