Planning restrictions mean that shoppers in Britain pay more for Ikea products than anywhere else in Europe, according to a report published today, which blames local government controls for hampering economic growth.

The study, by the right-of-centre Policy Exchange think-tank, argues that Britain’s planning system holds back the economy by causing an artificial scarcity of land. That forces up prices and causes interest rates to increase, while the heavy burden of compliance drives up costs to business. The report takes the Swedish furniture company as an example because its products are made overseas but sold across Europe.

According to the report, a Poang armchair, Tylosand sofa, Sultan bed, Varge sideboard, Leksvik wardrobe and a Forsby table cost £1,483 in Britain but just £1,229 in Germany or £1,239 in the Netherlands.

Oliver Marc Hartwich, the co-author of the report, said: “Consumers are paying the price through a lack of choice in ‘clone town Britain’ and much higher retail prices than in other European countries.”

Peter Hogsted, Ikea’s UK managing director, told The Times recently that planning had limited the furniture company’s expansion in Britain to four outlets in six years.

The Swedish company has set aside £1 billion for expansion. Mr Hogsted said: “For sure, the planning system needs to be reviewed and renewed. The speed with which it is being renewed is very slow and very complicated.”

However, an Ikea spokeswoman said last night that other factors were involved. “Planning, availability and the cost of land are some but not all the contributory factors in prices in the UK,” she said.

A spokesman for the Department for Communities and Local Government, which has responsibility for plan-ning, said: “The Government recently commissioned the second Barker Review to look at how better the planing system can support economic development, and we’re hoping to respond to that this year. The system should support economic development, sustain communities and protect the environment. That’s the balance the system needs to strike.”

The report calls for the national green belt policy to be abolished, for complexity in the system to be cut and for the introduction of simplified planning zones to reduce delay.

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