Land News

Barker to Call for More Responsive U.K. Urban Planning System

Bloomberg , 4th July, 2006

Kate Barker, the Bank of England policy maker charged with forming proposals to overhaul Britain's urban planning laws, will call for a system that makes it faster and cheaper for companies to obtain building permits.

Chancellor of the Exchequer Gordon Brown and Deputy Prime Minister John Prescott in January asked Barker to find ways of making building laws spur economic growth. Later today Barker will unveil interim findings of her work, which is due to be completed by the fall.

She will call for a set of rules that cut transaction costs associated with the undue uncertainty and delay of the present system, according to the Treasury. She will also aim to make rules flexible and responsive to changing economic and social needs.

The Confederation of British Industry, the country's biggest employers' group representing 240,000 companies, said planning rules introduced originally in 1947 and changed in 2004 have ``failed to deliver'' and are not ``business friendly.''

Barker's recommendations will also take into account environmental and local needs.

The government ``must deliver on the deregulatory promises that it has made so clearly, freeing up business from needless red tape to create greater wealth for the nation,'' Richard Lambert, director general of the CBI, said in his inaugural address yesterday in London.

Too Cumbersome

Pfizer Inc, the world's largest drugmaker, dropped plans to locate its European headquarters in the U.K., choosing Germany instead, because planning laws are less cumbersome, the Observer newspaper reported on June 25.

The newspaper cited documents from Barker that also showed a 1 billion pound ($1.8 billion) expansion plan by Swedish furniture retailer Ikea had been ``effectively stalled'' by the planning system. A GE Healthcare campus had also run into trouble, the newspaper said.

Barker's overhaul is part of a wider package of measures that Brown wants introduced to help U.K. companies compete with emerging economies such as India and China. He wants more investment in science and education, better infrastructure and fewer business regulations.

Today's is the second report Barker has conducted for Brown. In 2004, she recommended that home-construction needs to double each year if it is to slow annual house-price inflation to the European average. An additional 120,000 private-sector homes are needed every year to reach that rate on top of the current rate of 125,000 gross completions, she said.

`Centralized' Policy

Barker, a former chief economist at the CBI and at Ford Europe, will say that much of the complexity and expense of the current system lies with the 1990 Town Planning Act, which is the longest piece of legislation in Britain's statute book. The act ``centralized many of the levers of planning policy'' and took decisions away from local government.

Brown will draw on Barker's recommendations in his Pre-Budget statement in the autumn. He call for changes based on the findings of the Eddington Review, which calls for more investment in transport infrastructure, and from the Leith Review, which looked at the skills that Britain's industries need to compete.

Derek Scott, a former economic adviser to Blair, and Gisela Stuart, a former health minister, said on May 31 that taxes and government spending are too high and described Brown's approach to economic policy as ``micromanagement.''

The U.K. has slipped to 12th in 2005 from eighth in 1997 in a table comparing the size of the government based on tax receipts as a share of gross domestic product, according to the Organization for Economic Cooperation and Development. Britain now ranks below Japan, Korea, the U.S., Spain and Switzerland.

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