Digby Jones thinks new planning laws could bring expensive delays

Its Director General Digby Jones, who has been visiting Scotland, said that England could become a more attractive location for companies.

The Scottish Executive has been considering a third party right of appeal over planning applications.

This would allow a wider range of individuals and organisations to lodge objections.

But Mr Jones said: "A lot of businesses tell me that frankly it's going to render a lot of Scottish businesses uncompetitive compared with those south of the border.

"Planning is often the cause of huge delay and is one of the reasons why so many times houses aren't being built and why house prices go up."

Changes to Scotland's planning laws have been proposed to make communities more involved in shaping their local environment.

Supporters of a third party right of appeal have claimed that the current rules make things much easier for developers than for members of the public.

'Secret' funding

But the CBI believes such claims are misleading and the proposed reform could lead to the domination of the planning process by non-governmental organisations.

"They can be secretly funded," said Mr Jones, "and their motives are not always shall we say in line with what people think they are.

Planning laws govern everything from house extensions to new factories

"They could come in, they could delay the application appallingly, they could add to the cost of the application.

"What you end up with is companies saying: 'well, if it's going to be like this I think I'll go and do it in England instead.'"

But organisations such as Friends of the Earth Scotland have been pushing hard for third party appeals to be allowed in strictly defined circumstances.

Its researcher Helen Todd said: "Everyone knows the planning system is in need of reform.

"Once communities become involved in the planning system they become disillusioned with how it works."

Local consultation

Friends of the Earth Scotland has highlighted cases such as those where landfill sites have been allowed near villages, with local people having little say in whether or not they go ahead.

Helen Todd said: "There's no doubt at the beginning there could be delays.

"But better quality plans which take into account local views could be processed quickly."

The Scottish Executive's proposals for changes to the planning laws are currently out for consultation, which will continue until the end of July.

A spokesman for the executive said: "The issue of whether to introduce a third party right of appeal is a complex matter with many potential implications and we recognise there are strongly held, and often polarised, opinions on the matter.

"That is why we are consulting widely before any decision is made, and we would urge anyone with an interest to engage in this consultation."