Darling seeks to calm restive business over tax

By Sumeet Desai and Matt Falloon

LONDON (Reuters) - Chancellor Alistair Darling will try to soothe business leaders' fears over the economy and higher taxes later on Tuesday, as concern grows that more firms could move their operations to more friendly climes.

Darling will tell the Confederation of British Industry annual dinner that no one sector will lose out because of a Treasury review into taxation of companies' overseas profits and that the government is committed to a competitive tax regime.

He will also probably outline how the government is tackling the economic slowdown and credit crunch as Britons get increasingly worried about their well-being in the face of soaring household bills and falling house prices.

A new opinion poll published in the Guardian on Tuesday showed the ruling Labour Party 14 points behind the opposition Conservatives -- the worst in more than 20 years.

Labour was pushed into third place in local elections this month and risks losing a safe parliamentary seat this Thursday in a contest triggered by the death of the sitting member, raising more doubts about whether Gordon Brown will continue as Prime Minister.

Emboldened by the government's weakness, business has been upping the rhetoric on the need for lower, simpler taxes. Several high-profile companies, including Shire Pharmaceuticals and United Business Media, have already announced they will move out of Britain to Ireland to pay less tax.

"What business wants from the system of corporate taxation in Britain is clarity, certainty and competitiveness," said Martin Broughton, CBI President Martin Broughton will tell Darling at the dinner. "What we are getting is cost, complexity, and capriciousness."

"We now have a tax system which makes it harder for both British and foreign firms to justify investing in Britain."