UK in damage control mode?

Britain is cutting red tape in bureaucracy in response to growing threat from India and China, reports Vijay Dutt.

india Updated: Dec 14, 2006 15:58 IST
Vijay Dutt

British Prime Minister Tony Blair’s recent announcement of 500 concrete steps, large and small, to cut red tape in the nation’s bureaucracy is being widely seen as a response to the growing economic threat from India and China.

The measures, which range from simplifying forms to providing fire safety certificates more easily is estimated to save individuals, corporates and charities over 14 billion pounds (Rs 119,000 crore). Blair claimed that he would soon sweep away another 500 administrative 'burdens', which would save them another two billion pounds.

Obviously Blair is keen to give a sharp competitive edge to British business in global trade. "The UK is one of the best places to do business and we need to keep it that way," he declared.

Both he and Chancellor Gordon Brown, the next prospective tenant of 10 Downing Street, have been voicing fears of British businesses being bruised by China and India.

For over a year, Blair and Brown have been warning about the rapidly growing economy, industrialisation and cheap labour in both the countries, and saying at every possible fora that if quick remedial actions were not taken British business would be left behind.

In his pre-budget speech last week Brown said, "Once responsible for just one-eighth of the world’s growth, China and India will soon capture almost half. Increasingly they are competing not just on low cost, but on high skills." There is an ambitious target to cut unnecessary bureaucracy by 25 per cent by 2010, said the head of the Better Regulation Executive at the Cabinet Office, William Sergeant.

However, he qualified that there were some things that would not be abolished, such as work permits, which is a sore point for Indian businesses. The Liberal Democrats trade and industry spokesman Edward Davey was equally sceptical: "After nine-and-a-half years in office it is rather late for the prime minister to don the mantle of deregulation."

But the key underlying question is whether emerging economies, notably India and China, pose a threat to, or offer an opportunity for British business. This was openly discussed for the first time at a recent meeting of the Confederation of British Industry (CBI) which Blair addressed.

Email Vijay Dutt:

First Published: Dec 14, 2006 15:57 IST