The Institute of Chartered Accountants’ Global Enterprise Survey Report 2010 (PDF) contains lots of interesting information, but its third and final section, on how businesses in different global regions view their ‘regulatory and taxation environment’, is perhaps the most interesting. The graph below displays responses to the question “How business friendly is your country’s regulatory and taxation environment?”
Given that the dark red means “very”, the bright red means “fairly”, the light grey means “not very”, and the dark grey means “not at all”, it is clear that the UK does not come out of this survey very well. Indeed, of the regions surveyed, UK businesses are the most likely to be unhappy, and the least likely to be happy, with their regulatory and taxation environment.
Equally interesting are the views given on which regulation and taxation factors are seen as a help or a hindrance. Every factor examined by the survey is viewed as a hindrance by UK businesses, with UK businesses often having the most strongly negative feelings of all the regions surveyed.
- On employment tax, the UK ranks fifth out of the six surveyed regions (excluding the Hong Kong-Singapore-Malaysia sub-region), with the only EU businesses more negative about it.
- On employment legislation, the UK ranks fourth out of six, with only EU and African businesses more negative about it.
- On business tax changes, the UK ranks sixth out of six.
- On planning regulations, the UK ranks fifth out of six, with only African businesses more negative.
- On financial reporting requirements, the UK ranks sixth out of six.
- On corporate governance requirements, the UK ranks fifth out of six, with only US businesses more negative.
- On health and safety regulations, the UK ranks sixth out of six.
- On environmental law, the UK ranks sixth out of six.
- On CSR reporting requirements, the UK ranks sixth out of six.
All this makes for pretty depressing reading. The lesson the government should take from it is that British businesses don’t need an old-fashioned industrial policy to help them grow. What they need is for government to just get out of the way, and stop making their lives so difficult.