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The Prime Minister last Thursday(26/10/2006) pledged to overhaul Britain's "outdated and bureaucratic" planning laws and praised business leaders in the North East for their successful response to the challenges of globalisation and emerging economies of India and China.

Tony Blair, speaking at the CBI North East annual dinner, said he was "increasingly concerned" that major infrastructure and investment projects were being hampered by a "hopelessly bureaucratic" planning system.

He told the 500 business leaders at the black tie event: "We need to ensure we bring our planning laws in line with something approaching the 21st century. I can tell you one major future piece of legislation will be a Bill to significantly simplify the planning system in this country."

He added: "We need to work with business in order to make sure it works properly."

Mr Blair also told the business leaders that the UK needs to adapt to the challenges of globalisation and, as a North East MP since 1983, he was proud of how the region had moved from traditional industries like ship-building and mining towards hi-tech industries such as bioscience.

The dinner, at the Gosforth Park Hotel in Newcastle-upon-Tyne, was hosted by CBI Regional Chairman Jamie Martin, managing partner at law firm Ward Hadaway, and sponsored by the regional development agency, One NorthEast.

As well as Mr Blair, the dinner heard from John Cridland, the Deputy Director-General of the CBI, who spoke about the “hard choices” the country faces because of globalisation: balancing taxation with growth and public services, improving the UK’s science skills, and how to tackle climate change.

On taxation, he said: “The UK has traditionally been regarded as a low tax country and our tax competitiveness has been a big part of the UK’s appeal for globally mobile business.

“However CBI members are increasingly concerned this tax advantage is being frittered away. While the UK is putting up taxes, other countries are becoming more competitive. Without a change in direction, particularly at a time when business is so globally mobile, jobs and investment will go overseas.

“We face a hard choice: are we prepared to trade capital allowances and incentives for simplicity in the tax system? Do we want to sacrifice tax credits which incentivise R&D to pay for cuts in the headline rate of corporation tax? And can we drive through the necessary reforms in public services to deliver efficiency gains and bring down the overall tax burden?”

On science, he said: “In a global economy, business investment and job opportunities will be driven by costs and talent. The UK cannot compete on cost with eastern Europe, China and India. So we must raise our game on skills, training and knowledge.

“How do we align the subjects people want to study with what the economy needs? How do we pay for this? And if we want to increase the numbers studying science and technology courses, which cost more than others, do we introduce differential pricing for degree courses or remove the cap on tuition fees?”

On climate change, he said: “The world is waking up to the threat of climate change and, as the implications come into focus, the challenge becomes ever more alarming.

“So far business has led the way in tackling it. But to achieve meaningful behaviour in people and societies we need the right incentives in place. Joined-up government policies would also help. Does it really make sense for carbon-emitting lorries to be trundling up and down the A1 rather than expand container port capacity in the North?

“And without global engagement, the UK’s own efforts will be meaningless. So, to what extent can business and the UK continue to show leadership without suffering undue competitive disadvantage?"

Mr Cridland added: “We need to ensure that the business voice is heard and understood at these political debates. Now, more than ever, the CBI must be vocal in making the pro-business case and ensuring that business is seen as what it is and be a force for good in society."

Mr Martin, who is stepping down as regional chairman in December after two years in the role, told his guests: “We have much to be proud of in our region – the economy continues to grow and we remain the only region which exports more goods and services than we buy in, and we have the highest number of start-up hi-tech businesses outside of London.

“But before we get carried away with our successes, there remains an awful lot to do. We need to see more than 30,000 new companies created before we even keep pace with the rest of the economy. In terms of GDP, the region’s only rival at the foot of the UK table is Northern Ireland.

“Whilst our unemployment rate is at an all-time low, its still the highest rate outside London and 60 per cent of our young people believe that they will have to move away to achieve their career goals.

“So, whilst the work of the CBI nationally continues to capture the attention of the media and the ear of both Government and the Opposition, here in the region it is critical that business continues to work to ensure its voice is more effectively heard.”