Trade minister says tax policy makes UK less attractive

LONDON (Reuters) - Britain is becoming a less attractive place to invest and work in because of government tax plans, trade and investment minister Digby Jones said on Friday, the latest non-political appointee to question policy.

The ruling Labour party has come under pressure to match opposition plans to raise more tax from wealthy foreigners living and working in Britain.

It has proposed to end tax breaks which mean rich residents who are non-domiciled for fiscal purposes pay no UK tax.

"I can give you five reasons as to why you should invest in Britain before you go and invest anywhere else in Europe," Jones told the Financial Times newspaper.

"But maybe there were seven and now there are five."

The government is due to report soon on its plan to charge, after seven years residence, non-domiciled residents 30,000 pounds a year to keep their status or become a normal UK taxpayer.

"It has caused people to say: 'Does this mean you don't want us?'" Jones said.

A spokesperson for the minister did not deny the reported quotes but said Jones believed he could continue successfully to make the case for investing in Britain.

"Lord Jones was registering concerns that he picked up while abroad promoting Britain to foreign investors, as it is his role to do," the spokesperson said.