The Angry Professor: Why bureaucracy hurts us all

By Prof. Kevin Morley, former CEO of Rover Group and founding member of Alchemy Partners

A recent PriceWaterhouseCoopers survey posed the following question: do you plan to start your own business in the next five years. In the US, more than 50% said yes. In Europe, fewer than 5% answered positively.

America has an enterprise culture. Europe and the UK do not. In this country bureaucracy thrives and the pervading attitude says success isn’t really worth pursuing; failure is seen as worse than death. The entire UK set-up is aligned to help bureaucrats, not business people. And experience tells me that bureaucracy kills entrepreneurialism by creating red tape and stifling creativity.

Here are four facts that reveal how good our system is for bureaucrats and how bad it is for business…

1) The M40 and M11

Want to know how much power civil servants have traditionally exerted in Britain? Just look at the M40 and M11 motorways. The M40 only reached Oxford for many years and the M11 ends at Cambridge. Why? Because civil servants wanted to be able to get to their university dinners quickly. I kid you not.

2) Our military procurement department

Here’s another interesting fact: Israel’s military procurement department – usually quite busy – comprises 200 people. The UK equivalent employs 108,000 and so they spend most of the day saluting each other.

3) The bureaucratic vicious circle

One of bureaucracy’s main aims is to create more bureaucracy – that’s what keeps the bureaucrats in work. The trouble is, bureaucracy stifles entreprenerialism like nothing else. The politicians always promise to exert more control over civil servants and quangos but never do.

4) Capital Gains Tax

This is another big issue. ‘Entrepreneur’s Relief’ from Capital Gains Tax currently carries a maximum lifetime allowance of £10m. Then we ask ourselves why so many UK companies are sold before they become really big players.

For business to really thrive, enterprise culture must exist in government too. Currently it doesn’t. To help business, politicians and bureaucrats just need to get out the way. Business doesn’t need over-regulating. But the country sure as hell needs entrepreneurs and business professionals. If everyone became a bureaucrat, and the PWC survey suggests most lean that way, then the system will fall apart.


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