Alistair Arkley column

Oct 12 2005 By Alistair Arkley, The Journal

You may recall that it's only a few weeks since we had not one, but two, Government Ministers visiting the region to discuss with North-East businesses our views on reducing the burden of regulation.

As I noted at the time, both John Hutton from the Cabinet Office and his Department of Trade and Industry colleague Barry Gardiner were undoubtedly sincere in their wish to reduce the so-called red tape mountain. But wishing is different to delivering as a recent `league table' ranking the ease of doing business across the world certainly demonstrates.

On the face of it, the World Bank's survey looks pretty good for the UK. Out of 155 economies we are rated ninth, well ahead of many of our Western European neighbours such as Germany, France and Spain.

However, a look behind the headline figures paints a different picture. For a start, we have actually dropped two places in the overall ranking, and within the criteria used there are wide variations in the UK's performance.

Whilst we are top of the league for gaining credit, we slump to 29th when it comes to handling licensing issues - a fact which hardly surprises me given recent experience with the new drinks licence system.

There are other messages about the urgent need for us to face up to the red tape challenge. For example, the World Bank emphasises that all the Nordic countries rank highly because `they have simple regulations that allow businesses to be productive and focus intervention where it counts - protecting property rights and providing social services'.

Perhaps one of the most important developments highlighted by this survey is that every country in Eastern Europe improved at least one aspect of their business environment.

In Serbia and Montenegro in just one year, the capital requirement for starting a new business was cut from e5,000 to e500, the time to start a new business was reduced from 51 days to 15, new labour laws made it easier to hire workers, the time to resolve commercial disputes fell from 1,028 days to 635, payroll and sales tax were replaced by a value-added tax, which is easier to collect.

The results speak for themselves - the number of newly registered firms jumped by 42%! If only we could achieve that here in the North-East.

I hope that those Ministers who were so sincere and committed when they met us will take the time to study the World Bank report - and press home its messages with their Government colleagues.