Alistair Darling launched moves to repair Labour’s strained relations with business last night by accepting that tax rates must be competitive to prevent companies going abroad.

After warnings from several big groups that they may relocate, the Chancellor told the CBI that governments should remember that industry did have a choice and he was determined that British business should not be the “fiscal fall guy”.

“Business is increasingly mobile,” he said. “Tax rates have to be globally competitive. Business is the linchpin of the British economy.”

Mr Darling’s attempt to woo the corporate sector in a speech marked by its pro-business tone came after a string of rows between the Government and the City over capital gains tax, the treatment of non-domiciles and the taxation of intellectual property held offshore. He promised to boost the role of businesses in delivering public services, giving them all fair access and competition.

He declared that it was time to reject calls for increased protectionism wherever they came from: “Now is not the time for putting up barriers to trade or increasing tariffs. Quite the opposite. Now is the time for all of us — governments and business — to make the case for more open and fair trade.”

Mr Darling pledged to use his new business tax forum to consult business over finding the right corporate tax structure to enable Britain to compete over the next ten to twenty years. Ministers would work with the forum towards bringing down the rate of corporation tax and to discuss the taxation of foreign profits.

“We need to ensure that the tax system is competitive and predictable, as well as ensuring the business environment is attractive to increasingly mobile businesses, “ he said.

Mr Darling said that getting business tax right was not easy. “We recognise that the need to fund public services — like universities and transport — from which you benefit, must be weighed against the need to maintain competitiveness. We need to get the balance right. We listen carefully to what you have to say and we will consult on significant changes which will affect your future competitiveness.”

The Chancellor told the CBI: “I want you to know that I am listening to you and, even though there will be times when we do not agree, it does not mean that I have not heard what you have to say.”

Mr Darling also promised a new “sector-by-sector” approach to promoting business success.