Globalisation is no longer just a threat to low-skilled jobs in Britain but could also pose a serious challenge to the skilled workforce as a "profound shift in global economic power from West to East" takes place, MPs warned today.

Members of the influential House of Commons Treasury Committee called for the UK's system of business taxes to be overhauled and simplified if the nation is to remain competitive in the new worldwide marketplace.

Globalisation, they said, was already having a "profound effect" on the UK economy which was likely to increase over the next 10 to 20 years.

"The adverse effects of globalisation on individuals in the UK may in many cases be more tangible and immediate than the wider benefits for society and the economy as a whole," the committee said in a report.

It noted how globalisation brought many benefits, pointing to increased levels of foreign investment, export opportunities and immigration of skilled labour for businesses as well as cheap imports for British consumers.

However, John McFall, the West Dunbartonshire MP who chairs the committee, warned of the potential dangers to the UK's workforce.

He said: "The notion that globalisation will have the greatest impact upon low-skilled employment may no longer be appropriate.

"Many emerging economies are investing aggressively in research and development and their skills base. As a result, highly skilled sectors in the UK labour market are likely to face increasing competition. It is imperative that government policy responds to this challenge."

The committee concluded that a profound shift in global economic power from West to East was under way with western economies, including the UK's, playing a diminishing role in the global economy over time, while China, India, and other emerging nations, such as Brazil and Russia, play an ever-increasing one.

The committee said reform of the corporate tax system was essential to ensuring Britain retained its competitive edge as a location for business.

"Simplicity is likely to be crucial to the effectiveness of a corporate tax system in an increasingly globalised economy," it said.

"We consider that the government should provide a more thorough and systematic analysis of these matters and of the effectiveness of its measures to create a simpler and better administered tax system."

MPs also called on the government to publish an annual assessment on the development of globalisation alongside the Pre-Budget Report.

Their findings concluded that, in the long term, open markets best served the interests of the global economy and warned against the dangers of increasing protectionist sentiment in Europe and the US.

"An increase in protectionist measures and a retreat from multilateral trade agreements and the Doha World Trade Round would endanger the progress of globalisation and eventually have an adverse impact on global growth and on the growth of the UK, which is historically a very open economy," said Mr McFall.

The committee also said that more work was needed on the "unresolved issues" around economic migration into the UK.