'BOROUGH'S BUSINESSES CAN BENEFIT FROM GROWING REGIONAL ECONOMY'

FROM AN ARTICLE FOR THE SHIELDS GAZETTE BUSINESS REVIEW

Since my election last year I have visited some great companies in South Tyneside, met some first-class managers, and talked with many highly skilled and committed employees. I have learnt a lot about the entrepreneurialism of South Tyneside, and what holds it back; about the strengths of the area, as well as the weaknesses; and above all about the potential for our businesses to grow.

I believe 2002/3 will be a crunch year for South Tyneside. The establishment of the South Tyneside Transformation Commission to establish a compelling economic and social vision for the Borough, along with the ideas to help us realise that vision, gives us the chance to develop a distinctive view of our own future. For the first time in a long time, we will be able to go to regional, national and international partners, whether in the public and private sectors, clear about our own strategy, and clear what we want from them.

When I arrived in South Shields, people said we had real weaknesses: that we were stuck between Newcastle and Sunderland, that we were small, that we were land-locked. But now I don't believe or recognise that description. Our job is to turn our characteristics - not weaknesses - into strengths. We should treasure the fact that we can offer people access to Newcastle and Sunderland while offering a distinctive quality of life. The fact that we are small means we can change fast. The fact that we have a unique combination of river and sea means we should be at the heart of a European centre of excellence in estuarial and offshore industry.

So I am optimistic about our ability to rebuild our economic base on new foundations. The battle to save the ViaSystems plant on Frederick Street (now Circatex), and launch a Management Buy Out with public and private support, was for me the seminal event of the last economic year. It taught me important lessons. Above all, it showed me that when we have a good product, combining people and plant, we can find backers even in a tough economic climate.

The future is going to be all about making South Tyneside a key part of the networks that makes up today's economy. That puts a premium on transport, on communications, on personal contacts and on the development of strong supply chains. But it also means we have a key vested interest in the development of a growing economy across the North East.

The establishment of the Regional Development Agency - One North East - establishes for the first time a dedicated instrument of economic development for the North East, with the power, the potential and the resources to take the tough, strategic decisions that are vital to our region's economic future. I want to see the RDA leading the way on land-use planning, on the development of vital clusters, on transport links to the North as well as to the West and further afield through the development of Newcastle Airport, on the linkage of universities to businesses and new products, and on support for small business.

I also want to see the RDA backing the key strategic projects that will give places like South Tyneside the chance to earn their spurs in the fast-changing economy. Take the example of the development of a centre of estuarial and offshore industry. We can contribute the Port of Tyne - probably the fastest-diversifying port in Britain and certainly one of the fastest growing employers in South Tyneside. We can offer thousands of shipyard workers as well as willing young apprentices. We can offer the Marine College with its world-wide reputation. We can offer dozens of small and medium-sized companies, from battery manufacturers to electrical engineers, who can make themselves an important part of a thriving supply chain.

But South Tyneside alone cannot lever in the public and private investment necessary to create the critical mass, the partnership links, the economic clout, necessary for business success in the modern world. The North East could grow without South Tyneside feeling the benefit - but South Tyneside cannot grow without a thriving North East.

To make the most of regional growth South Tyneside needs to play to its strengths. I want to see some radical ideas come out of the Transformation Commission. Why shouldn't South Tyneside boast a university campus? Why can't we upgrade our industrial land through a mixture of public and private commitment? Why can't we rebuild the retail base of the town? Why can't we build up a network of businesses around some of our big companies - not just Circatex but Price Waterhouse Coopers with a key white collar outsourcing venture in South Shields?

The answer is we can do these things if we ask the right questions and make the right choices. But we also have to get the basic things right - from planning to red tape to technology transfer to export advice. The alphabet soup of public agencies offering to help - from the Small Business Service to the Learning and Skills Council and Trade Partners UK - can seem daunting, but they are there to help (and they do all have web-sites!).

"I'm from Government and I want to help you" will send most businesspeople running a mile, but these agencies are there to help you access what Government has to offer, from partnerships for training to export advice. For example, there is a strong view that there is a market failure in the provision of expansion finance in the North East, so a public-private partnership will establish a Regional Venture Capital Fund. I want to see South Tyneside entrepreneurs taking advantage of this new initiative.

For a long time business has asked for a stable macroeconomic climate. Our economy has real sectoral and regional imbalances, not least caused by the exchange rate. But the bare facts are that Britain has not had a period of low inflation and low interest rates of the type we are now experiencing for at least a couple of generations. It provides the sound foundation for business success. It is Government living up to its first economic responsibility.

Now we have to build on that foundation. It means continuing to press the Government to make the investments necessary for modern business - not least in transport and education. It means continuing to improve the tax and regulatory framework - from reformed Capital Gains Tax to telecoms regulation.

But it also means looking to ourselves. That is what businesses do every day of the week. It is what the local and regional public sector must do to perform its functions competitively and not just effectively.

And I haven't even mentioned the Euro! It is going to be an interesting year. I look forward to working with you in the challenging times ahead.