UK: Deloitte Monday Briefing: How To Boost Business

Last Updated: 7 November 2012
Article by Ian Stewart

Most Read Contributor in UK, August 2017

The Monday Briefing, written by Ian Stewart, Deloitte's Chief Economist in the UK, gives a personal view on topical financial and economic issues.

  • Across the western world policymakers are searching for ideas on how to raise growth rates. Simplifying business regulation is one such idea, and one with few drawbacks. Easing the burden of regulation on business is an achievable, low cost policy with a record of success.
  • The World Bank's annual Doing Business report ranks 185 countries on the environment they provide for small and medium sized businesses. The ranking has a compelling simplicity. It is based on ten bureaucratic hurdles facing business from starting a new enterprise to arranging construction permits, getting electricity, registering property and paying taxes.
  • One of consistent findings of the report is that advanced economies provide the best environment for business. Singapore tops the 'ease of doing business' league table while Denmark, New Zealand, Australia, Korea the US and UK feature in the top ten.
  • A rough north south divide emerges in Europe. The UK, Ireland and Scandinavia rank among the best places to do business not just in Europe but in the world. Germany, Austria, the Netherlands are somewhere in the middle of the European league, followed by Spain. Italy and Greece lag a long way behind, beaten by a number of less-developed countries such as Tunisia, Botswana and Tonga.
  • Three things really cheered us about these rankings.
    • First, countries have a real choice over the effectiveness of regulation. In response to its economic crisis Greece has significantly eased the burden of regulation on business. Creating a good environment for business is not just the prerogative of richer nations. The former Soviet Republic of Georgia is now ranked at nine in the Doing Business league, ahead of Australia. Rwanda ranks well above richer, leading economic powers as China, India, Brazil or Italy.
    • Second, the biggest improvements in regulation in recent years have occurred in less developed countries. Since 2005 Eastern Europe and Central Asian economies have done the most to boost the environment for small and medium sized business. These structural changes will help raise growth rates, incomes and opportunities for years to come.
    • Third, good regulation does not necessarily mean fewer regulations. The Scandinavian economies, where regulation and government spending are far more prominent than in, say the US, rate as good places to do business. High levels of social protection can be combined with a business-friendly environment.
  • Business-friendly regulation is the equivalent of a free tax cut – it is virtually costless way of raising growth. Governments across the world are increasingly taking that message to heart.


UK's FTSE 100 ended the week up 0.9%, following mixed economic data.

Here are some recent news stories that caught our eye as reflecting key economic themes:


  • The longest weather-related shutdown of US stock trading since 1888 ended on October 31st – US disaster vulnerability
  • Hurricane Sandy may cost the insurance industry up to $20bn, a tally that would put it second only to 2005's Katrina for insured losses, according to a new damage estimate – Hurricane Sandy
  • The US economy created a better-than-expected 171,000 jobs in October – US growth
  • Eurozone unemployment rose to a record high of 18.49m in September, according to data from Eurostat – unemployment
  • The numbers of 20-29 year-olds in Ireland fell by 8.8% year-on-year in Q2 2012, as well as by 4.3% in Spain and by 3.5% in Portugal, as young people emigrated in search of work elsewhere – youth unemployment
  • German Chancellor Angela Merkel said Ireland was an "excellent example" of implementing economic reforms – euro crisis politics
  • The National Institute of Economic and Social Research (Niesr) cut its forecasts for UK growth, saying the economy will struggle to return to normality while the banking system remains impaired – banking stress
  • Data from the Bank of England showed UK consumer lending rose by £1.2bn in October, the largest rise in more than 4 years, driven by a £893m increase in overdrafts and loans – squeezed consumer
  • UK manufacturing contracted for a sixth consecutive month in October according to Purchasing Managers data, with companies receiving fewer orders and experiencing higher costs – slowdown
  • The Spanish economy contracted by 0.3% in Q3 2012, the fifth consecutive quarter of contraction – Spain
  • Ratings agency S&P downgraded Argentina one notch, from B to B-, citing "the increasing challenges the government will likely continue to face to design its economic and debt management policy" – Argentina
  • The Greek Court of Auditors unanimously ruled that proposed cuts in pensions and bonuses for state employees were unconstitutional, although Greek Finance Minister Yannis Stoumaras said "the measures will be applied" – Greece
  • The UK's first 4G services were unveiled in 11 major cities, promising speeds up to five times faster than third generation mobile technology – mobile revolution
  • Shares in BT rose nearly 7% as cost cutting helped it overcome the recession, regulation and poor weather to deliver an 8% rise in half–year profit – cost cutting
  • Publisher Pearson said it has agreed a deal with German media group Bertelsmann to merge their Penguin and Random House businesses, under a joint venture to be called Penguin Random House – M&A
  • The Walt Disney Company agreed to buy Lucasfilm, the company behind the Star Wars franchise, from its chairman and founder George Lucas for $4.05bn – M&A
  • Shoppers at Tesco were able to temporarily take advantage of a promotional glitch in the supermarket's computer system to buy six bottles of £9.99 wine for less than the cost of a single bottle – computer glitches
  • North Korea's Air Koryo, the world's worst airline according to Skytrax ratings, opened an online booking service in an effort to boost its image, despite the site not allowing payments by credit or debit card – flight of fancy

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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