Doing Business In Britain

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

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 ...

160 %
Very satisfied 11
Fairly satisfied 67
Neither satisfied nor dissatisfied 11
Fairly dissatisfied 10
Very dissatisfied 2
Don't know *

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 ...

160 %
Much more attractive 3
Slightly more attractive 13
About the same 13
Slightly less attractive 44
Much less attractive 26
Don't know 1

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 ...

160 %
Much more attractive 2
Slightly more attractive 16
About the same 18
Slightly less attractive 39
Much less attractive 21
Don't know 4

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?

160 %
Very likely 33
Fairly likely 27
Not very likely 15
Not at all likely 21
Don't Know/not applicable 5

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

160 %
Very great 14
Fairly great 29
Not very great 19
Not at all great 34
Don't know/not applicable 4

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

160 %
Call centre 5
Accounts 2
Production/Manufacturing 12
R&D/Design 4
IT Systems support & development 7
Financial back office 5
Other 9
None 71

All considering relocating an operation abroad (124)

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

160 %
Costs 81
Labour skills 24
Technology 1
Regulation/legislation 26
Customer needs 10
Exchange rates 4
Other 29
Don't know 0

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

160 %
Much more friendly 1
Slightly more friendly 12
The same 12
Slightly less friendly 42
Much less friendly 33
Don't Know 0

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

160 %
Strongly agree *
Tend to agree 14
Neither agree nor disagree 14
Tend to disagree 49
Strongly disagree 19
Don't know 4

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

160 %
High priority 29
Low priority 67
Don't know 4

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

160 Overall staff levels Investment
160 % %
Significant decrease 8 7
Slight decrease 18 25
No change 50 55
Slight increase 19 8
Significant increase 5 4
Don't know 1 1

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?

160 %
Increased a lot 62
Increased a little 33
Stayed the same 5
Decreased a little 0
Decreased a lot 0
Don't know *

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?

160 %
Increased a lot 48
Increased a little 43
Stayed the same 7
Decreased a little 1
Decreased a lot 0
Don't know 1

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