The regional director of the Confederation of British Industry (CBI) talks to Business Editor Julia Breen about the issues facing businesses in the region.

Sarah Green wasted little time returning to work after the birth of her daughter in 2004. From spending her days looking after Jemima - "the hardest job she has ever done" - she now has the task of representing the interests of thousands of businesses.

Ms Green is the regional director of the CBI, an organisation whose voice is heard in the corridors of power.

Her boss, Digby Jones, director-general of the CBI, is respected by businesses and politicians, but is less popular with the trade unions. Mr Jones visits a different regional CBI office each week, and between these visits is lobbying politicians.

In common with her boss, Ms Green is not one to tip-toe around the issues. During our conversation, she is quick to challenge - traits that no doubt served her well as a commercial lawyer with international law firm Clifford Chance.

Originally from the North-East, Ms Green graduated from Sheffield University with a law degree in 1995 and trained with Clifford Chance in Shanghai, Hong Kong, and London.

She joined Arthur Anderson in 1999 and remained there for three years, before becoming a lecturer at the University of Northumbria. She then joined regional development agency One NorthEast as internal communications manager.

Since joining the CBI, most of Ms Green's time has been spent visiting businesses and learning about the issues facing them.

"Energy, pensions, transport, the black hole in the economy, the comprehensive spending review, are all the real issues which businesses say needs debating.

"The CBI has access to top level government and it has to be able to raise the debate on these issues.

"My key concern is to ensure that businesses are part of these debates. We need to make sure that our views are fed into the decisions the Government makes."

Despite that, Ms Green says the Government has lost its credibility among businesses in recent years, particularly in the area of pensions.

"They lost a lot of confidence when the Turner Report came out and then the Government backed down on public sector pensions,"she says.

"Basically saying that people were going to have to work longer in the private sector, and that businesses was going to have to foot some of the bill to do that, while at the same time paying taxes for public sector pensions, was a very difficult message for businesses to stomach."

Other issues of concern are energy costs, particularly for manufacturers, and the worry about competition from Eastern Europe.

"We have to make choices," she says. "Research and development spend in the North-East went down against the UK average last year, because businesses are struggling with other costs. But if we don't innovate, we don't compete.

"It is critical we stay ahead of the game. It is not just China we have to compete with, it is Eastern Europe and India.

"Also, China will produce 300,000 science and engineering students this year and the UK will only produce 100,000. It is difficult for us to keep our manufacturing edge if we need more skilled workers."

Ms Green believes businesses in the North-East needed to stop worrying about the North-South divide and start worrying instead about competing with the rest of the world.

"People get hung up about the divide. We are unlikely ever to close the gap, but we just need to keep growing. Basically, it is about raising our game and being more ambitious in our outlook.

"We need to not be looking to the south of England, but look to Europe and globally at what we can do to be more competitive."

The CBI has just opened an office in Beijing, and has offices in Washington and Brussels, which Ms Green believes are essential if we are to understand the competition and the way the rest of the world sees the UK.

However, at a regional level, she says businesses, and individuals, have to concentrate on training, ensuring there are enough skilled workers, and trying to retain the graduates who pass through the region's universities.

"We all have to work together," she says.

"Businesses, organisations, the public sector and individuals. It is not about working separately and competing, but working as one to the benefit of the whole region."