Bearing gifts, as much as receiving them, comes with unforeseen consequences

The familiar nationally renowned label may be little more than a camouflage uniform disguising an intruder from a land better known for cuckoo clocks and time-sensitive trains, acquired by a crafty CEO with a Brooklyn accent.

Before the Christmas Story pales into Twelfth Night oblivion, it might be worth comparing the season of giving and the arrival of Wise Men bearing gifts with the flight of our national treasures – if not into Egypt, certainly into the hands of overseas interests. Assets built up over generations of British toil and enterprise have slipped out through the back door with the speed of the contents of a burst pipe in a cold snap.

Cadbury is probably the most contentious example of late, given the broken promises and heartache endured by its workforce, but other household names such as Jaguar / Rover, British airports, national energy providers and utilities, banking institutions – even the high-speed rail link to the Channel Tunnel – are all now foreign-owned, with Twinings Tea about to emigrate to Poland to capitalise on cheaper production costs.

In the run-up to Christmas, supporters of a previously little-known group called UK Uncut grabbed the headlines, much to the amusement and frustration of shoppers in Oxford Street and several other town centres, by staging sit-ins, even supergluing themselves to windows in stores such as

Top Shop, in protest against

the loss of £25 billion in UK tax revenue as a result of companies registering themselves abroad.

While it is not illegal to use such a ruse to avoid the demands of the taxman, the protesters contend that in the current climate it is at least commercially unprofessional and certainly against the spirit of the Cameron doctrine that everyone should contribute to the process of restoring business confidence and balancing the national budget.

Furthermore, they feel that it discriminates against the small companies who have been hit hardest by recession and are now facing the greatest obstacles to recovery. All enterprises, they say, should register to pay tax where they trade.

We may not have seen protests on our own streets, but there is more than a little similarity with the arguments raised locally about the apparent iniquities of the zero-ten regime, under which profits earned by ‘foreign’ enterprises leave the Island untaxed while local businesses are charged the full local rate.

We are all aware of the official line that without such inducements, investment would shrivel and be directed elsewhere, though, as yet, there is precious little hard evidence to support it.

Wiser counsels have debated the pros and cons in more eloquent column inches than I would ever attempt to do, though it’s fair to point out that we enter 2011 under a glare of critical international scrutiny which could yet do more to dent our reputation than the perceived gains being claimed for the policy.

Suffice it to say that our non-GST sister bailiwick has seen fit to come to a mutual accommodation. But as I freely admit, I am no economist, so were I to suggest that a universal 10% corporate tax across the board might appear cheaper to administer and would at least appear fairer, I’m sure I should be dismissed as naive.

The inward and outward flow of commodities, services, capital, revenues and investment underpins international commerce as much as it supports local business. It fails if the direction becomes purely one-way. Tariffs, sanctions and artificial meddling can easily prove to be counter-productive in the long term.

Tariffs provoke tit-for-tat reprisals and deeply felt animosity among rich competitors, and can decimate those poorer economies unable to compete on equal terms.

Similarly, the imposition of sanctions can, once the tipping point is passed, result in the instigator being called upon to bail out the intended ‘victim’, while artificially skewing tax regimes to attract inward investment can have a hugely corrosive effect on domestic productivity and infrastructure.

There are those who argue that unfocused international aid-giving and the long-term activities of NGO agencies have created a ‘dependency trap’ or entrepreneurial bypass which then stifles the long-term participation in a global trading pattern.

As a nation, the UK stands alongside the Shepherds and the Three Kings in its generosity. Last week the government announced that despite the forthcoming tough constraints on domestic public and welfare spending, it is nonetheless willing to underwrite the UN Disaster Relief programme to the tune of a further £40 million, because fellow signatory nations are reneging on their commitments.

Britain is already the largest contributor to the fund, having donated almost six times as much as Germany, more than twice as much as Spain and 14 times as much as the United States.

But books do have to be balanced. In an attempt to repatriate tax revenue lost overseas, the UK Treasury has announced a crusade to claw back the £66 million owed last year by individuals living abroad and claiming UK benefits to which they are not entitled.

It’s a good headline-grabbing cause, even if it looks tame alongside the flight of benefit payments to non-resident dependent families in eastern Europe sanctioned by EU legislation.

And what prospects for the lucky new Spanish owners of BAA or Abbey National when the shackles of the Euro bind tighter? Will they, like Greece and Ireland, be forced to depend on European cash – including a generous wad of UK sterling – to bail them out?

It all goes to show that bearing gifts, as much as receiving them, certainly comes with unforeseen consequences.