How bad is the state of Britain's in-built entrepreneurial spirit?

Well, even the Government believes it is not great while CBI director general Sir Digby Jones thinks it is in grave danger.

Is it to do with over-regulation or are there deeper issues?

The Government in a recent report admitted that the UK only had a medium level of entrepreneurial activity - the ability to seize new business opportunities.

On international comparisons, we are on a par with Germany and Italy, better than France and Japan but significantly below Canada and the United States.

The report warned: "If society is not supportive of entrepreneurs and their activities, fewer people will be prepared to take risks in business.

"Cultural attitudes to failure are also important as entrepreneurs sometimes need to be able to learn from their mistakes before going on to establish successful businesses."

It went on: "The UK's more risk adverse approach generally contributes to low levels of entrepreneurial activity and affects the early adoption of new technology and new products and processes based on such technologies.

"Without changes in cultural attitudes towards risk, it will be difficult to achieve significant improvements in levels of innovation and overall economic performance."

Sir Digby blames teachers for starting the rot.

He accuses them of being suspicious of business and in a speech in Birmingham last week attacked them for "sports days when you can't win" and "exams you cannot fail".

But he is equally critical of politicians and trade unionists who, he maintains, are "squeezing entrepreneurial flair out of people".

Sir Digby blames regulation and red tape including the stance of "the thought police, otherwise known as the Health and Safety Executive" who, he says, makes it very difficult for companies to give teenagers ground floor experience of what business is all about.

Today a Midlands small businessman warns that red tape is a "commercial killer" that is undermining industry in the region.

Doug Squires, of Squires Gear and Engineering, based in Coventry, said the current high levels of legislation were making it increasingly difficult to run an SME and make money.

Mr Squires said: "The more time we spend form filling, the less contribution we make to the well-being of the business and its bottom line.

"Whilst I am a great advocate of safety within the work place, I find it very frustrating when we have to nominate a trained first-aider to put on a pair of gloves to administer a simple sticking plaster to a small cut on an employee's finger. Not only this, a formal document has to be filled in and kept for future records.

"We need every minute to get on with the job and concentrate on the core business."

Government has been trying, encouraging business angels, for example. But it appears to be losing the war on red tape. It seems the plight of the risk-taking entrepreneur requires more than a sticking plaster.