Rachel Reeves has said the government will “rip out … absolutely insane” environmental regulations that are preventing wind farms and homes from being built across the UK.

The chancellor told a panel hosted by the International Monetary Fund in Washington that green rules were “well-meaning regulations that come in for the right reason … that end up stopping good things from happening”.

“We have gone too far in regulating for risk and we’ve forgotten about regulating for growth and we need to turn the pendulum back,” she said. “Regulation in the UK holds us back and we are ripping that out.”

• Rachel Reeves must get it just right in ‘Goldilocks’ pitch to IMF

Reeves said ministers have had to veto investment “because of sea bream swimming in a part of the North Sea, or there are some spiders which are unique to this area, which means you can’t build the thousands and thousands of homes that we need”.

“We’ve spent £100 million in the UK building a bat tunnel to go alongside the high-speed rail link between London and the north of England, because otherwise the bats would not be able to cross the road.

“It is absolutely insane, the costs that are added to essential infrastructure investments.”

Reeves has won praise from the IMF for the government’s planning overhaul and deregulation agenda. Kristalina Georgieva, its managing director, said the chancellor’s policies would “lift up growth”.

“She is tackling very tough issues, getting reprioritisation of spending, getting the regulatory environment to be more rational and then taking on the battle to get it done. And it’s really impressive,” Georgieva said.

The IMF has cut the UK’s annual GDP forecast for this year by 0.5 per cent to 1.1 per cent as a result of uncertainty caused by American tariff policies and the continued weak productivity performance.

Reeves is in Washington for IMF meetings and will hold her first bilateral talks with Scott Bessent, the US treasury secretary, as the government tries to strike a deal with the Trump administration to lift a universal 10 per cent tariff on goods imported from the UK.

The government has said it is not in a rush to secure a deal, despite a July deadline when Trump has said reciprocal levies on more than 100 countries will come into force. Reeves said the UK would keep a “cool head” in the negotiations and was committed to reducing tariff and non-tariff barriers to promote “free and fair trade”.