The government's "patent box" is the tax avoidance package companies have been begging for

It might incentivise innovation, but it definitely incentivises paying far less tax.

The Conservative party back-benches are seething with rebellion. Not only do ministers deplore David Cameron for an un-Tory like attitude toward gay marriage, in recent weeks he has further upset them with a positively radical spiel directed against those super-corporations the conservative leader suspects of tax avoidance:

Any businesses who think that they can carry on dodging their fair share ... need to wake up and smell the coffee.

However. Refreshing though the rhetoric certainly is, the actions of the Government seem to tell a different story. Corporation tax will have fallen from 28 per cent to 21 per cent toward the end of the Government’s first term in 2014 — and this will translate into a loss of roughly £5 billion in tax revenues each year as those cuts are enacted (according to 2011 estimations by the Treasury).

The buck doesn’t stop there. In order to better facilitate corporate needs, HM Revenue and Customs is set to introduce a new form of tax relief for businesses due to begin in April this year. It’s called the Patent Box. Ostensibly, it means that a company which shows sufficient innovative nous by patenting innovations will be entitled to a tax break of 13 per cent, applied to the value of the product. In theory this should provide impetus for companies to conceive fabulous new technologies, and give a spurt to growth and development thereby. Right?

Well not quite. The first problem is that said companies are not actually required to own the patent themselves in order to attain the tax break. They can simply lease a patent from the original patent owner; consequently there is no real incentive to invent stuff creatively and in-house, so to speak. But the most salient fact about the Patent Box is that it does not apply to the patent in isolation. A company could, for instance, produce a tractor, and if that tractor was possessed of a patented right view mirror, the revenue from the whole vehicle itself — not only the mirror — would be subject to same overall and significantly larger cut in tax.

In other words, a measure which appears to contain a degree of legitimacy, in fact becomes yet another way for big corporations to achieve massive, unwarranted tax slashes on their products. And this is ironic. The Conservatives always pride themselves on encouraging small business development, perhaps because this provides a highly effective propaganda sheen — allowing their PR initiatives to be expressed in terms of hard working individuals and entrepreneurs rather than faceless corporate monoliths. But the Patent Box will only serve the latter. Small businesses do not have the purchasing power to buy in bulk the products which will benefit from the tax cut, nor can they afford to gamble with new technological innovations, nor can they divert money into buying up the patents of others.

Part of the whole problem lies in the way in which the government develops Controlled Foreign Companies (CFCs) regulations. One of the lead advisors who helped the government to devise the Patent Box was one Jonathan Bridges — a tax advisor for KPMG, an accountancy company which has no remit outside ensuring the lowest tax returns for its corporate clientèle; it has, therefore, no commitment to any notional "national interest".

The use of the representatives of corporate power to provide advice on the means by which that power should be channelled in socially effective ways makes about as much sense as employing a local war lord to advise on the committee of Amnesty International. But despite its connotations, the practise of employing huge corporations to help devise precisely the laws which are supposed to regulate them is one which both the current and the previous Government have engaged in. At the time of the transition to the coalition government, Labour had already set up working groups for consultations regarding CFC reforms; panels which included representatives of HSBC, Vodafone and Shell — all major multi-nationals and all involved in controversies regarding tax evasion.

The current Government has an objective rationale for its position which isn’t simply an expression of neo-liberal ideology and partisan politics. These super-companies have genuine power — and the ability to decamp to another country taking thousands of jobs with them. Like petulant, spoiled children, they are always on the verge of tantrum, should their desires not at once be met. In the midst of an economic crisis there is a cogent argument that any single Government must of necessity make their tax rates as favourable as possible in order to attract those companies and secure those jobs.

But the problem with such an argument lies in its generalisation. If every government follows suit, slashing corporate tax over and over in order to remain competitive, and if all governments adhere to the strictures of such competition, we are at once locked into a downward spiral, a race to the bottom in which the benefits gained from corporation tax are increasingly illusory.

And it is important to recognise that this is exactly the type of cycle which got us here in the first place. We were sold on the need to slash regulations in the finance industry, and look what happened. By playing this game the government are not responding pro-actively to the crisis, they are adopting the very logic which led to it.

How can these companies be regulated? By people putting pressure on their governments for sure. But also by directly targeting the companies themselves through grass-roots activity and customer boycotts. Following mass protest, Starbucks was recently "persuaded" to agree to pay £10m in corporation tax in the UK for each of the next two years. A drop in the ocean certainly. But nevertheless an indication that, ultimately, it is the consumer who has the ability to make or break a company.

Innovate on the mirror, profit on the tractor. Photograph: Getty Images
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No, Jeremy Corbyn is not antisemitic – but the left should be wary of who he calls friends

The Labour MP's tendency to seek out unsavoury comrades is a symptom of an intellectual and political malady: the long-term ideological corruption of that part of the left in which he was formed.

“The scientist is not a person who gives the right answers,” said the French anthropologist Claude Levi-Strauss. “He’s one who asks the right questions.”

The British novelist Howard Jacobson is not a scientist, but he has asked the right question about the rise of Jeremy Corbyn, the improbable-but-likely next leader of the Labour party. Here it is:  “Why can’t we oppose the inequities of a society weighted in favour of wealth, and all the trash that wealth accumulates, without at the same time having to snuggle up to Putin, pal out with Hamas, and make apologies for extremists?”

One answer to the Jacobson Question has been offered by Yasmin Alibhai Brown, a defender of Corbyn. His “tendency for unchecked inclusiveness”, as she delicately puts it, is due to his “naivety”. But that explanation will not do. We won’t find the answer in one man’s naivety, especially not a 67-year-old with a lifetime of political experience behind him.

We must go deeper, reading Corbyn’s undoubted tendency to snuggle, to pal out and to apologise as a symptom of an intellectual and political malady: the long-term ideological corruption of that part of the left in which he was formed.

This corrupting ideology can be called “campism”. It has caused parts of the left to abandon  universal progressive values rooted in the Enlightenment and sign up instead as foot soldiers in what they see as the great contest between – these terms change over time, as we will see – “Progressive” versus “Reactionary” nations, “Imperialism” versus “Anti-Imperialism”,  “Oppressed” versus “Oppressor” peoples, “The Empire” versus “The Resistance”, or simply “Power” versus “The Other”.

Again and again, the curse of campism has dragged the political left down from the position of intellectual leader and agenda-setter to that of political irrelevance, or worse, an apologist for tyranny. 

Only when we register the grip of this ideology will we understand why some leftwingers march around London waving placards declaring “We are all Hezbollah now!”. Only the power of the ideology accounts for the YouGov poll that showed 51 per cent of Jeremy Corbyn’s supporters believe America is the “greatest single threat to world peace”, and one in four think a “secretive elite” controls the globe.

The intellectual history of campism has three chapters.  

In the short 20th century, it took the form of Stalinism, a social system that was at once anti-capitalist and totalitarian, and that spread a set of corrupting mental habits that utterly disorientated the left.

Clinging to the dogma that it must have been some kind of socialism that had replaced capitalism, many imagined themselves to be involved in a “great contest” between the capitalist camp and the (imperfect) socialist camp. And that ruined them. They became critical supporters of totalitarianism – notwithstanding their knowledge of the show trials, mass killings, gulags, political famines, and military aggressions; notwithstanding the fact that they themselves were not totalitarians.

The result was the slow erasure of those habits of mind, sensibilities and values of an older leftwing culture rooted in the Enlightenment. In its place the Stalinist-campist left posited lesser-evilism, political cynicism, power-worship, authoritarianism, and sophisticated apologias for tyranny.

In the Sixties and Seventies, the New Left created liberatory social movements that changed the face of the western world for the better. But the New Left was also a cheerleader or apologist for one third world authoritarian “progressive” regime after another, including Maoist China, a monstrous regime responsible for the deaths of tens of millions of “its own” people. Believing the world was divided into an imperialist “centre” exploiting a “periphery”, the New Left thought its duty was to support the latter against the former.

And when the baby boomers grew older and made their way into the universities and publishing houses, they formed the global creative class that has been reshaping every aspect of our intellectual culture ever since. Again, much of that reshaping has been a boon. Schooling us all in the anti-imperialism of idiots, and the romantic cult of the transformative power of revolutionary violence, has not.

After 1989, much of the left didn’t miss a beat. It quickly developed a theory that the world was now made up of a “Resistance” to “Empire”. Here was yet another reductive dualism. But this time there was barely any positive content at all, so campism took the shape of spectacularly inchoate and implacable negativism.

The result has been immense political disorientation, political cross-dressing, and moral debasement across swathes of the left. How else to explain the leftwing social theorist Judith Butler’s astonishing claim that, “understanding Hamas, Hezbollah as social movements that are progressive, that are on the left, that are part of a global left, is extremely important”?

When we understand how campism creates that kind of ideology-saturated and captive mind, we can better understand Corbyn’s choice of comrades and answer the Jacobson Question. 

The ideology demands two commitments. First, “Down With Us!” – the commitment to oppose the West as malign. Second, “Victory to the Resistance!” – the commitment to side with, or to apologise for, or to refuse to criticise, any “resistance” to the West.

The commitment to oppose every projection of force by the West as malign underpins Corbyn’s commitments to unilateral nuclear disarmament and withdrawal from Nato, his attitude to the IRA, and to Putin, and his false equating of the actions of Isis and the coalition in Iraq.

Corbyn will withdraw the UK from Nato because it is the military organisation of the West and therefore “imperialist”. He turns the world inside out and “blames the USA and Nato rather than Putin’s imperialistic Russia for the crisis in Ukraine,” notes Labour MP Mike Gapes.

I believe Corbyn would lead Britain into a warmer relationship with Putin’s Russia, and even thinks it was a bad thing that Poland was ever “allowed” to join Nato.

Astonishingly, given recent history, he also argues that Poland should have, “gone down the road Ukraine went down in 1990”. Corbyn opposes all military support to Ukraine and seems quite uninterested in the Ukrainian bid for freedom from Russian control. What matters much more to him is adherence to the campist ideology: “The self-satisfied pomposity of western leaders in lecturing the world about morality and international law has to be challenged,” he rails.

Campism also explains Corbyn’s comparison of the actions of Isis today and the actions of the coalition forces during the Iraq war. And those comments have a precedent of sorts. Corbyn was national chair of Stop the War during the Iraq war when the leadership circulated a statement that supported the “right” of the “resistance” to use “whatever means they find necessary”. At that point, the so-called resistance was targeting democrats, including the free trade union leader Hadi Saleh.

The second commitment of the campist left has been to side with, or apologise for, or refuse to sharply criticise, the so-called resistance camp. Without understanding this, Corbyn’s apologies for the Muslim cleric Raed Salah remain a mystery, his attitude to the IRA or the antisemitic Islamist terror groups Hamas and Hezbollah will seem harmless, even ahead-of-his-time diplomacy, and the idea that he indulges antisemitism will appear to be a “slur” by a “lobby”.

Corbyn has defended the antisemitic Raed Salah in these terms: “He represents his people extremely well and his is a voice that must be heard . . . I look forward to giving you tea on the terrace because you deserve it.”

In fact, Salah was found guilty of spreading the blood libel – the classic antisemitic slander that Jews use the blood of gentile children to make their bread – reportedly during a speech on February 2007 in the East Jerusalem neighbourhood of Wadi Joz.

Corbyn said he has no memory of meeting Dyab Abou Jahjah. Within minutes, Twitter was running photographs of Corbyn sitting next to Abou Jahjah – the Lebanese extremist who said, “I consider every death of an American, British or Dutch soldier as a victory” – at a public meeting.

Jahjah then boasted on Twitter of his “collaboration with Jeremy Corbyn” and insisted that Corbyn was “absolutely a political friend”. Again, it seems that Jahjah, being part of the “resistance camp”, according to the ideology, was simply beyond criticism.

It did not seem to matter that Jahjah reportedly referred to gay people as “Aids spreading fagots”, and was arrested in Antwerp for organising a riot. Or that he claimed to have published anti-Jewish cartoons showing Hitler and 15-year-old Anne Frank naked in bed with the caption: “Put that in your diary Anne”.

As the Community Security Trust commented: “I am sure that Corbyn would be the first to condemn Holocaust denial. The problem is not that Corbyn is an antisemite or a Holocaust denier – he is neither. The problem is that he seems to gravitate towards people who are, if they come with an anti-Israel sticker on them.”

Hezbollah comes with the mother of all anti-Israel stickers. That is why – although Corbyn knows that it is a radical Shia militant group that has subverted Lebanese democracy, actively supported Bashar al-Assad's brutality in Syria, and seeks the destruction of Israel – he nonetheless (and campism is a politics of “nonetheless”) tells the left that Hezbollah are our “friends”.

Hamas too. Corbyn also calls the Palestinian Islamist group his “friends” and argues that the organisation should not be called “terrorist”. Yet Corbyn knows that Amnesty International believes Hamas to be guilty of war crimes, torture, abductions, and summarily killing civilians. He knows that when five Jews praying in a synagogue were murdered, along with the heroic Druze policeman who came to their aid, in 2014, Hamas welcomed the attack, calling it a “quality development”. They even called it a “terror attack” – embracing the label Corbyn says they do not deserve.

The problem is not that Corbyn agrees with what all these people say. It is that he agrees with who they are: the Resistance to Empire. The apologies and the contortions and the evasions all begin there.

And then there are the Jews.

The concern here is not that Corbyn indulges in antisemitism. He does not. The concern is that he is has associated with others who have. The concern is that, when he is faced with what is called the “new antisemitism”, he is lost. At best, he is an innocent abroad who – oddly, in the age of “Google it!” – can’t seem to work out who is who, or what is what.

Writing for openDemocracy about Corbyn, Keith Kahn-Harris expresses scepticism about Corbyn’s explanation of his choice of comrades. “Although he has defended his contacts with Islamists, the IRA and others as a contribution to peace-making,” Kahn-Harris notes. “Corbyn does not have the deep relationships across the spectrum [or] the even-handedness that this would entail.”

What strikes Kahn-Harris most about Corbyn’s record is something else entirely: that he “is constantly predisposed to be at least convivial towards a broad swathe of those who see themselves as opposed to ‘the west’.”

He goes on: “Much of what appears to be [Corbyn’s] openness does indeed reflect engrained political pathologies.”

And that has been the claim of this essay, too: we have to look to those ingrained political pathologies – I have used the short-hand label “campism” to describe them – to answer the Jacobson Question.

Alan Johnson is the editor of Fathom: for a deeper understanding of Israel and the region and senior research fellow at the Britain Israel Communications and Research Centre (BICOM).