UK: Tyne wears well. (3 of 3)

UK: Tyne wears well. (3 of 3) -

Last Updated: 31 Aug 2010

Take the road north and prosper in Tyneside.

Alan Halfpenny, ICI's distribution manager on Teesside, is rubbing his hands with glee following the Government's commitment to upgrade the whole of the A1 to motorway status.

Speaking at a Management Today seminar looking at how the improved transport links would affect the North, Halfpenny told the audience of industrialists that the new link would overcome years of perceived isolation. For ICI the new road should boost competitiveness dramatically. Halfpenny reckons that his transport costs are currently some 5 to 6% higher than European rivals.

Developments at Newcastle airport and improvements to the Newcastle/London rail service will also help to lessen the isolation.

The effects of these improvements are already luring both overseas and British firms to the area. "When I go to meetings now I hear so many southern accents," says Phil Eadon, head of marketing for the County Durham Development Corporation.

Millicom, the American telecommunications group, is one of the newcomers. The company had decided to leave central London because it just could not get the staff that it needed there. Currently there are some 210 staff on site, and "we get more out of our staff in Darlington than in London", says deputy chairman Petre Scrope.

In the post-war period up to 34% of jobs in the North were concentrated in three sectors: steel, shipbuilding and coal. But the 1980s recession was nearly the area's undoing because of this overdependence. Some 140,000 jobs disappeared, while the proportion left in those industries today has fallen to 2.5% of the North-east's workforce. Yet unemployment is roughly at the level of 10 years ago, before the real shrinkage began.

An NDC business survey of 1,120 companies taken before entry into the European exchange rate mechanism (ERM) found that confidence remained high. But Paul Bridges, managing director of Consett-based Culluware, and regional Confederation of British Industry chairman, told the seminar that joining the ERM would mean that the North "will experience difficulties as we acclimatise to the new discipline. There is no way that we are immune to the national trend. But it is better than in the past, where we caught pneumonia when the national economy caught cold."

(Terry Marden is assistant editor of The Northern Echo and is currently Industrial Journalist of the Year.)

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