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Rt. Hon. Peter Mandelson - Former Secretary of State for Trade and Industry (Jul 1998 - Dec 1998)

The Sheffield Star "Made In Sheffield" Annual Dinner


Wednesday, October 28, 1998


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Thank you for that friendly introduction. I am very pleased to be here in Sheffield tonight, for this very welcome and long overdue celebration of Sheffield business and industry.

I would have liked to spend the day here and in the region. To visit local businesses. To see for myself what local enterprise is achieving. To talk to the TECs and the Business Links. To hear at first hand of people's hopes and worries.

And I found out how you are preparing for the Millennium: the new Millennium gallery and museum and the Winter Garden.

And then I could have got on to my really favourite subject ... the Dome. I take it round with me wherever I go. We'll not be separated. Actually I'm proud of it. It will, after all, host the most famous and most ingenious Millennium celebrations anywhere in the world. Demonstrating the best of British. Forward looking. Fun. Unforgettable. Pride in our past. Confidence in our future. That's how I want others to see us in 2000. That how I want the British people to see themselves in 2000.

Sheffield is, like the rest of Britain, rightly proud of its traditions, but also looking forward, preparing for the future. I think you call it listening and doing. I'll sign up to that. It's better than talking and doing nothing.

You have a great range of strengths in your city. Your education institutions, your new airport, innovative manufacturing industries, a growing financial sector and cultural industries.

Anyone who meets David Blunkett for more than two minutes knows about these. There's no getting away from Sheffield with David. - not that you'd want to. And after David's finished, there's Dick [Caborn], Clive [Betts], Helen [Jackson]. And when they're done Bill Michie (LAB) takes up the baton, then Richard Allan (LIB DEM). I'm not fussed by Liberal Democrats. I'm not so keen on Liberal Democrat leaders saying Sheffield shames democracy - not on national television, not for the whole world to hear, not when there are jobs and investment at stake.

So, when I think of this thoroughly politically motivated and tireless bunch of city members, I'm not surprised you've got the new University for Industry coming here. And the United Kingdom Sports Institute. And the new National Centre for Popular Music. Is there nothing not made in Sheffield any more?

Prince Nasseem. Pulp. Jarvis Cocker. The Full Monty. Are there no limits to Sheffield's greatness? But I'll give this to Sheffield, you give as much as you take.

Through David, you're doing the power of good for the nation's education system. His last eighteen months at the DfEE have been non-stop. Alongside his work to repair our schools, under his leadership, his Department have driven forward essential measures to help the unemployed back to work, cut class sizes, raise education standards, create education action zones, lay the foundations for a skilled and highly trained workforce.

And - if that wasn't enough - prising £19 billion out of Gordon Brown (now there's a colleague) for further educational reform, the largest single investment ever made in education in Britain. Made by a Labour Government. A New Labour Government.

Don't let anyone tell you that voting Labour doesn't make a difference. A difference to the NHS. To fighting crime. To helping the elderly. The homeless and badly housed. A new start for single mums. And a welfare system that will give a hand up, not just a hand out.

But like everything else in this world, it has to be paid for.

Not from increased taxes, or from increasing borrowing or living off tick. But from enterprise. From individual firms and companies, adding value, generating income and creating wealth.

And there will be no abundance of wealth unless we're clear about the sort of economy we want in this country An entrepreneurial one. A dynamic and challenging one. One that isn't afraid to see others succeed if they've earned it. And one that will tolerate failure in the knowledge that we want a risk-taking culture and that people in business will learn from mistakes and will be better business people for that.

That's what an enterprise economy is all about.

And there is no more important time than now to re-double our efforts in backing enterprise and the efforts of companies of all size; large, small and medium.

With one quarter of the world, including Japan, now in recession, no country is immune from the effects of the current instability in the world economy.

The Government's job, amidst this instability, is to continue to steer a path of stability at home to withstand the worst effects of the world downturn and to create the conditions for sustained and steady growth in the future. That's the way to secure low inflation, yes, and the way, too to achieve a stable and competitive exchange rate in the long term without experiencing the familiar old boom and bust on the way.

Here in Sheffield you know that there is good news to go with the disappointing.

I was saddened to hear the news yesterday about the loss of 260 jobs at Avesta. But take heart from the fact that the UK Steel industry is among the most modern and efficient in the world, after years of often painful re-structuring. No industry can ever stand still. Steel is no exception. But its huge investment in new technology will certainly pay off.

And, of course, EDS will be locating a new IT Services Centre soon in Sheffield creating at least 300 new jobs.

And today, I have announced the creation of a further 300 new jobs here in South Yorkshire. Maple Leaf Foods, with the help of a £3 million grant from DTI, is investing in a new bakery in the Dearne Valley to produce bagels and speciality breads for UK and European markets.

The message is that jobs are continuing to be created in the UK. We are continuing to attract large inward investors like Maple Leaf, as well as growing existing companies.

And this evening I want to lift our sights even further. I want to talk about the future. And what we have to do to prepare Britain for it.

Since I arrived at the DTI in July, I have been focused on one clear objective: to put the future on Britain's side. To equip our country and its economy for the new industrial revolution, to raise our game so that we can compete and win in the knowledge driven economy of the future.

Our future competitive success depends on the exploitation of knowledge for commercially profitable ends. Exploiting the new information, electronic and bioscience technologies. Harnessing the Internet to usher in the era of electronic commerce so as to cut business costs and help create new markets and new products. Applying our knowledge to every stage of the production process. From product design, to computer assisted processing, to marketing and after sales service.

The generation and exploitation of knowledge in the economy will lead to a great step change in levels of competition and in the speed at which business is transacted and product markets evolve.

This message - that to survive and prosper we must all be more innovative, more enterprising and quicker to embrace technological change - is one I want to drive home to all sectors of the economy, to new firms and mature industries, to the universities and other centres of research and teaching, and, of course, throughout Government.

Regional policy

And it is an important message for the regions too. I say this not just because Dick is here. Regional policy has gone out of favour in the last decade and a half. No more. It's back. The New Labour version.

For too long, we have simply thrown away the full productive potential of the English regions. Our goal is to lift Britain's economic growth rate. We can only do so by employing to the full the human resources and infrastructure of the North of the country as well as the South, otherwise we shall be held back again and again by the overheating of the South.

That's why we cannot ignore the need for effective regional policy.

As Dick [Caborn] has told you, because he is their godparent, we are creating the Regional Development Agencies in the English regions from April next year. Not as a new tier of bureaucracy, nor as an extension of local government, but to provide crucial focus and economic leadership at the regional level.

I am working closely with Dick [Caborn] and David [Blunkett] to set up these new RDAs.

We need the RDAs to drive up the competitiveness and performance of all the regions. To do so, they need to do a few things really well, not to respond to every passing whim and fad passed down from every part of Whitehall. They need to help pull away the barriers - the skills barriers, the planning barriers, the funding barriers and yes, the confidence barriers, the barriers to ambition that still exist for too many in this country, and probably, in this city as well.

RDAs will take the regional lead on attracting inward investment, which continues to be important in creating jobs, introducing new ideas and techniques, and supporting local supply chains.

But inward investment cannot be our only or indeed our main source of new jobs. It must be matched by the creation of indigenous, home grown companies and jobs. A new enterprise sector of the British and regional economy.

Your RDA - under the able chairmanship of Graham Hall, a blunt Yorkshireman if ever there was one - will have a clear mandate to develop a coherent and ambitious strategy to improve the region's economic performance.

RDAs will be inheriting existing resources and activities from a number of organisations, including regional Government Offices, English Partnerships and the Rural Development Commission. But they will also be doing new work on competitiveness, enterprise, training and skills.

David announced last month that he would be giving RDAs a £38 million budget for promoting the regional skills agenda. He's got so much (money), he's giving it away.

In addition to these resources, I can announce tonight that I will be giving RDAs resources to create a new competitiveness fund. This will provide a new budget for promoting enterprise and innovation, and encouraging business networks, in their regions.

Existing DTI resources which are currently deployed on inward investment and promoting competitiveness in the regions will also be transferred to RDAs, around 300 posts across England.

The new competitiveness development fund will be additional to these resources.

The funding will be available to RDAs to spend on the priorities they identify. In one region the RDA may wish to use it to employ a facilitator to build links between universities and business or support regional networks. Another region may wish to benchmark the competitiveness of key sectors.

The only condition is that the money is spent effectively on increasing competitiveness of the region.

Clusters

I want RDAs also to play a pivotal role in promoting networks and clusters in their regions - key groupings of services and industries which will encourage and facilitate the development of supply chains and collaborative partnerships between private capital and public infrastructure.

The promotion of clusters is a new departure for Government policy, but one which I believe the people of Sheffield are well placed to understand.

I visited Silicon Valley earlier this month, a very famous cluster of hi tech companies. But you have your own clusters here in Yorkshire.

The traditional grouping of steel industries and all their applications around Sheffield. You are now seeing the formation of rich new cluster of media and related companies, some 170 in total providing over 1,000 high quality jobs.

Increasingly our wealth will be dependent upon the development of interdependent industries and services in particular areas and sectors.

Supported by my Department and European Regional Funding, the ground breaking partnership of the Regional Innovation Strategy has now set up 12 very active and exciting sector groupings. All are business led. All are focused on particular areas of either historic strength - like metals, chemicals or textiles - or of new opportunities - like environmental technology, medical equipment and electronics.

The aim is not to try to pick winners - not seeking to "import" new clusters to a particular area. Nor to put all our eggs in one basket. Diversity is key. We must avoid over dependence on single industries, as you have learnt in the past.

Networks must be market and business driven. They must be based on what is here and working. And hopefully they will support industrial spin offs and start ups, new companies employing new technology, with high growth potential.

Tonight's award will go to a local entrepreneur or business which has developed an idea which will enhance the city's reputation for quality and innovation. This is what I mean by enterprise and is exactly the sort of success I want to see more of.

Once again, Sheffield stands as a model to other parts of the country. Once again, the "Made in Sheffield" mark stands as a symbol of quality and innovation.

My message for you tonight is that we must return Britain to its proud traditions of manufacturing success. Not to recreate the industries of the past. But to see British know how and British skills building products and delivering services that target emerging new markets and which match the best in the world.

Sheffield will play its part in that success.

Your city was in the forefront of the first Industrial revolution. You will be at the heart of the next.
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