Salmond's council of advisers

Sir George Mathewson described the process of employing someone as a "frightening exercise" and the red tape surrounding it "horrific".

The former Royal Bank of Scotland chairman is advising the Scottish Government on boosting competitiveness.

His comments came as he was questioned by the Scottish Parliament's economy committee on his new role.

"For anybody that employs anyone, the red tape is horrific," said Sir George, who is heading First Minster Alex Salmond's new council of economic advisers.

Negative effect

"I have a view that the chancellor of the exchequer should be forced personally to employ someone and fill in the paperwork.

"Then you would see a radical change."

Sir George told MSPs on the committee he was not against employment law, but said the system had to be modernised to make it less bureaucratic.

"I don't know if anyone round the table employs anyone personally, but it's a frightening exercise," he said.

Scotland's planning system, Sir George added, had been a "failure", and had possibly had a negative effect on achieving economic growth in Scotland.

The advisory group will take a central role in helping the SNP administration hit its target of matching the UK growth rate by 2011.