Doing Business In Britain

Friday 14 November 2003

Company decision-makers believe the UK is a good place to invest although not as attractive as before, according to new research from MORI.

The survey, commissioned by the CBI in association with iSoft, reveals 78% of business leaders believe the UK remains an attractive place to invest and the majority (60%) expect to expand UK operations. However, seven in 10 (70%) say it has become worse over the past five years and three in five (60%) expect it to get worse over the next five years.

In addition, two-thirds (67%) believe the Government places a low priority on delivering a favourable business climate. Three quarters (75%) say the government is less business friendly compared with five years ago, and more than two-thirds (68%) expect the situation to worsen.

A rising number of business leaders appear to be looking overseas — 60% say they are likely to expand operations outside the UK over the next couple of years. More than two in five (43%) say they face pressure to relocate some activities abroad and 29% have already done so.

Production is the main function moving overseas but firms are increasingly relocating IT support, call centres, financial operations, R&D and accounts. Of those, four-fifths say costs are the key factor driving firms away, followed by regulation and labour skills.

More than nine in 10 (95%) say they spend more time complying with regulations compared with five years ago, and 91% expect this to worsen over the next five years.

A third (32%) say tax increases have hit business investment, with a quarter saying that they had triggered staff cuts.

Technical details

• MORI carried out a telephone survey of 251 chairmen, chief executives and other senior level directors drawn from a broad range of companies in the UK. Around a third of the companies represented in the sample were from the service sector, a quarter were from manufacturing with the remaining companies covering utilities, technology, distribution, new media and mining. The sample was drawn from the CBI's membership database and included companies with global operations and companies operating solely in the UK domestic market.
• Fieldwork was carried out at MORI's telephone unit, MORI Telephone Surveys (MTS). Interviews were conducted between 8–22 October 2003.

Topline Results

• Topline results based on 251 telephone interviews conducted by MORI with senior executives from CBI member companies.
• Unless otherwise stated, figures quoted are percentages based on 251 interviews in the UK
• Fieldwork 8–22 October 2002.
• Where percentages do not add up to 100% this is due to either computer rounding or questions allowing multiple answers. An asterisk denotes a figure below 1%.

Q1 In your opinion, how attractive is the UK as a place to invest i.e. establish or expand a business? Would you say it is …

Q2 Thinking, over the last 5 years, would you say that the UK has become more or less attractive as a place to invest/do business? Would you say it is …

Q3 And in 5 years' time do you expect the UK to have become a more or less attractive place to invest? Would you say it will be …

Q4 How likely are you to set up or expand your next business operation (i.e. future new or expanding business) outside the UK in the next couple of years?

Q5 How great are the pressures for you to relocate some of your activities abroad?

Q6 Which, if any, of your operations have you relocated overseas in the last couple of years?

All considering relocating an operation abroad (124)

Q7 What factors are driving your decisions to relocate some of your activities abroad?

Q8 Compared with the situation 5 years' ago, would you say that the government is now more or less business-friendly?

Q9 Over the next five years, do you think this government is likely to be more or less business-friendly?

Q10 Do you believe the Government places a high or low priority on delivering a truly favourable business climate?

Q11 For each aspect I read out, has the increasing tax burden brought about an increase or decrease?

Q12 During the past 5 years, would you say that the amount of time that your business spends complying with Government regulations has increased or decreased? And is that a lot or a little?

Q13 Over the next five years do you expect the amount of time that your business spends on complying with government regulations to increase or decrease?