Darling to meet insurance industry over tax changes

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The Independent Online

In an unprecedented move, the Chancellor, Alistair Darling, will make an appearance at tomorrow's board meeting of the Association of British Insurers, where the trade body will press him on a range of issues including tax and regulation.

The ABI board, chaired by Archie Kane, who runs Scottish Widows, invited Mr Darling – the first time a Chancellor has attended the ABI's board.

The insurers will oppose proposed changes that could see the Treasury tax UK companies on their foreign earnings. A number of companies, including Shire Pharmaceuticals, have said they will move their headquarters if the change is made.

The ABI is also concerned about the impact on insurers if the deposit protection scheme is extended to cover more than the £35,000 of bank deposits it currently safeguards. It wants the Bank of England to take the lead on future bank rescues and greater protection of bank investors' interests.

Insurers want assurances from the Government that it will take measures to protect against a repeat of last summer's extreme floods, which cost the industry billions of pounds. The Government is trying to shore up its relations with business after a string of proposed tax changes that have caused many in the City to doubt its commitment to the UK as a financial and corporate centre.

The Treasury announced yesterday the members of the Chancellor's forum on tax, announced amid uproar about the proposed changes. Among the forum's heavy-hitters are Douglas Flint, Julian Heslop and James Law-rence, the finance directors of HSBC, GlaxoSmithKline and Unilever respectively. Others will be the finance directors of BT, Rolls-Royce, BP and Kingfisher, as well as Nicolas Moreau, chief executive of Axa UK, and Richard Lambert, the director general of the Confederation of British Industry.

The president of the CBI will keep up the pressure on Mr Darling tonight in a speech at the business lobby's annual dinner, attended by the Chancellor.

Martin Broughton, the chairman of British Airways, will say the economy can weather the credit crunch as long as the Government does not make business "the fall guy" by increasing taxes or rushing through new regulations.

He will warn: "What business wants from the system of corporate taxation in Britain is clarity, certainty and competitiveness. What we are getting is cost, complexity and capriciousness."

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