UK is ‘better for business than the US’ – World Bank

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Britain is now a better place to do business than the United States, according to a major study published last night.In a boost for George Osborne, the World Bank said the United Kingdom is ranked above America for only the second time since its ‘Doing Business’ report was first published more than a decade ago.

The news was welcomed by ministers who have slashed business taxes and attempted to reduce red tape in a bid to make Britain more enterprise friendly.

But separate figures showed the British economy cooled by more than expected over the summer – fuelling fears that the recovery is being hindered by the darkening outlook around the world.

Britain was the fastest growing economy in the Group of Seven major industrialised nations in both 2013 and 2014 but the pace of recovery has eased in recent months.

The slowdown is a fresh headache for the Chancellor ahead of next month’s Spending Review and Autumn Statement as he struggles to balance the books.

‘There are clear global risks and there is still much more to do to fix our economy,’ Mr Osborne said.

The World Bank said Britain is now the sixth best country in the world to do business out of 189 – up from eighth last year and tenth the year before that.

That put the UK ahead of the US in seventh, Germany in 15th and France in 27th.

The UK was last ahead of the US in the 2011 report when it was ranked fourth and America fifth.

Government ministers, led by David Cameron and Mr Osborne, have spent the last few years promoting Britain all over the world on trade missions in a bid to show that the country is ‘open for business’.

The main rate of corporation tax paid by companies on their profits already fallen from 28 per cent in 2010 to 20 per cent today and is due to reach 18 per cent at the end of the decade – making it the lowest in the Group of 20 trading nations.

Singapore is ranked the best economy in the world to do business by the World Bank followed by New Zealand, Denmark, South Korea and Hong Kong – and then Britain.

The rest of the top ten is made up of the US, Sweden, Norway and Finland.

Business Secretary Sajid Javid said: ‘The UK has once again climbed up the rankings and is one of the top places in the world to do business, getting closer to the government’s target of reaching the top five.

‘This is international recognition of the UK’s strong and stable business environment, competitiveness and entrepreneurial spirit. Our economy is now growing faster than any other G7 nation.

‘The government is taking steps to ensure that every part of Britain benefits from the growing economy and that everyone who works hard gets the opportunities they need to succeed.

The Office for National Statistics said gross domestic product – the total size of the economy – increased by just 0.5 per cent in the third quarter of the year.

That was down from 0.7 per cent in the second quarter and came as construction and manufacturing output shrank.

The report fuelled fears that the pace of recovery is easing in Britain as storm clouds gather over the global economy.

Mr Osborne said: ‘It’s good news that Britain continues to outperform other western economies. But there are clear global risks and there is still much more to do to fix our economy.

‘In the Autumn Statement we will take more steps to ensure we feel the recovery right across our country, make the long-term investments for the future and, crucially, continue to make the tough decisions required so that Britain lives within its means.’

Treasury sources pointed out that the UK economy has now growth for 11 quarters in a row since the start of 2013.

Output crashed 6.1 per cent during the Great Recession of 2008/09 under Labour but is now 6.4 per cent higher than it was before the pre-downturn peak and 12.3 per cent higher than at the time of the 2010 general election.

Joe Grice, chief economist at the ONS, said: ‘While growth has slowed from the previous quarter, the economy overall is still expanding steadily. However, the sectoral pattern is mixed. Growth in the services sector has been robust but both manufacturing and construction output have shown falls.’

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