Senior figures in the legal profession have called for lower taxes and a less bureaucratic regulatory regime to protect the UK's £167bn professional services industry from growing threats posed by emerging economies.

The call is contained in a report published this week by the Professional and Business Services Group (PBSG), a body established in March 2010 whose membership includes the senior partners of Linklaters and Freshfields Bruckhaus Deringer, Robert Elliott (pictured) and Will Lawes.

The report claims that the UK's reputation as a favourable place to do business is being undermined by retrospective tax legislation and increasing bureaucracy. The report also highlights the central contribution professional services make to the UK economy, putting its value at 13% of GDP – higher than manufacturing and financial services. The report also says that the value of professional services exports have risen from £25bn in 2000 to £61bn in 2010, equivalent to 14% of total annual exports.

The PBSG – the successor to the Professional Services Global Competitiveness Group founded in September 2008 by then Chancellor of the Exchequer Alistair Darling – is also lobbying the Government for modernisation of the UK's business infrastructure and moves to make it easier to recruit skilled workers.

The report also argues that income tax for the highest earners should be lowered "at the earliest possible opportunity", that the Government should incentivise banks to lend more to small and medium-sized companies and that UK employment tribunals are in need of an overhaul.

The lobbying group, which also includes Pinsent Masons senior partner Chris Mullen and former Clifford Chance senior partner Stuart Popham, as well as senior partners at accounting firms including KPMG, PricewaterhouseCoopers and Baker Tilly, represents firms employing around 3.5 million people in the UK.

Kingston Smith senior partner Michael Snyder, the chairman of PBSG, commented: "The success of the professional and business service community depends, in large part, on the success of its clients. We welcome the steps Government is taking to improve the business environment, but this alone is not enough."

He continued: "The purpose of this report is to start a debate about a new direction for the Government's innovation and growth strategy, which is smart, sustainable and inclusive."