EU firms rate UK 'hard to work with'

Britain is the most difficult country in the European Union with which to do business, according to a European Commission survey of firms across the 15 member states.

The poll of 4,000 businesses in September blamed bureaucracy and red tape for making Britain and, to a lesser extent, Italy, the hardest nations to work with.

The finding is an embarrassment for the Government, which has tried to lead the way in calling for economic liberalisation and completion of the single market. Ministers were also unhappy that the poll was published on the day that Frits Bolkestein, the European Commissioner responsible for the internal market and taxation, was in London for talks with Tony Blair.

A Treasury spokesman sasid: "On the face of it, the figures ... fly in the face of all the facts," adding that Britain was "the largest winner of inward investment in the EU, which is a vote of confidence by international business".

Michael Howard, the shadow Chancellor, said: "British business is being stifled by red tape and regulation. Last year there were 3,865 new regulations introduced in the UK – an all-time record. Is it any wonder that business is suffering?"