While the OP's frustration is understandable, I would say that this is simple example on why the UK startup scene is non-optimal. Allow me indulge in some over-generalization. (And for the record, I /have/ started a tech business in both the UK and USA.)
* A culture of over regulation. It's not just the UK govt that does this - you'll find most large businesses like the bank mentioned putting up roadblocks.
* Concentration of talent in financial services. Investment banks pay alot of money for top talent. Heck, when I first moved there I was working for an investment bank and enjoy the cash and perks - I should have been doing my own startup but money in hand now is hard to turn down.
* Expensive everything. I would say that you need at least 2X more cash to start a company in the UK than compared to 2nd-tier-startup-markets like Atlanta, where I currently live. Sure, you can economize in creative ways, but that takes you away from your core mission in a startup: to build awesome products/services.
* A culture of over regulation. It's not just the UK govt that does this - you'll find most large businesses like the bank mentioned putting up roadblocks. * Concentration of talent in financial services. Investment banks pay alot of money for top talent. Heck, when I first moved there I was working for an investment bank and enjoy the cash and perks - I should have been doing my own startup but money in hand now is hard to turn down. * Expensive everything. I would say that you need at least 2X more cash to start a company in the UK than compared to 2nd-tier-startup-markets like Atlanta, where I currently live. Sure, you can economize in creative ways, but that takes you away from your core mission in a startup: to build awesome products/services.