The BBC financial journalist Robert Peston is hardly an extreme leftist but he makes the following point in his book Who Runs Britain?: "I am not arguing for a super tax, or any kind of special tax on the wealthy. But most of the super wealthy would not have been able to accumulate or sustain their wealth without the stable infrastructure provided by the UK - and by a "stable infrastructure" I mean an educated workforce, a National Health Service that sustains that workforce, roads, rail, police, a justice system safeguarding property rights, a fire service."

None of that is provided by the tooth fairy, though the super-wealthy often act as though they think it is. And if headmasters, senior policemen, civil servants, junior executives and so on pay 40% tax on all their income, should those who earn a great deal more do the same? But the pattern in the UK is that those on lowest incomes pay no tax and those on the highest incomes generally pay minimal tax. In Brown's Britain, the rule is that if you don't want to pay tax, be impoverished or obscenely wealthy."

One of the key reasons why our taxation system is so distorted is the way the Fat Cats are able to make use of offshore tax havens. Richard Murphy of the Tax Justice Network describes the problem as follows: "What do tax havens do? In truth, the term is a misnomer, and we prefer the term "secrecy jurisdictions". This is because they offer not one thing but three: low or zero taxes, secrecy, and lax regulation. In doing so they "compete" against reputable countries, trying to outdo them on ever lower corporate taxes and laxer regulation. As we said in our June submission to the Treasury committee on offshore financial centres, tax havens set out deliberately to "undermine the impact of legislation passed in other jurisdictions". This is their core business, and this is the threat they pose to the world.

"The impact of this is now visible in the economic crisis. The banking system has ceased to function because banks do not trust their peers' finances, structures and accounting disclosure. Opacity has been at the heart of the matter, and it is secrecy jurisdictions that create this opacity. First, they offer secrecy. All major banks have taken advantage of this, assisted by the "big four" firms of accountants who operate in all the world's significant tax havens.

"Second, they create uncertainty about who owns what. Offshore entities were used to isolate ownership of financial vehicles from onshore parents to secure higher credit ratings. The arrangements are often abusive, involving trusts and supposed charities. The result was, for instance, that when Northern Rock was nationalised, the Commons did not know whether this meant its Jersey-based shadow, Granite, was too. Its £40bn of assets apparently existed in limbo. In consequence it is often the case that nobody knows who will honour the debts of what are, legally, separate entities. All of the victims of the current crisis had plunged very deep into this style of offshore operation.

"Third, they generate complexity, a form of opacity. Complexity has without doubt been used to shift risk from big institutions to society. Companies have spread complex structures across jurisdictions to exploit regulatory gaps. Even if each haven's claim to be properly regulated were true, the regulation of such firms falls between stools, since each jurisdiction only accepts responsibility for what happens in its domain. Regulation cannot function in such a world - a fact the failing banks exploited. And tax havens will enable many beneficiaries of the years of exuberance to protect their winnings in offshore black boxes, even if law courts wish otherwise.

"These havens are not just the palm-fringed islands of popular imagination. They are also places at the heart of the global economy. In particular the City has many offshore features. The IMF thinks London is offshore. When coupled with links to satellite havens like Jersey and Cayman, it becomes clear that Britain must be central to a global response to this problem. Gordon Brown and his predecessors have ignored this. As a result they have knowingly permitted the harm which secrecy jurisdictions wreak on the poor at home and abroad. Unless they are tackled, tax havens will sabotage any efforts to build global governance and international cooperation"

Amen to that. But many who would agree in principle fear that this is utopian. For the last thirty years we have been given to understand that any attempt by governments to raise money from the financial elite will simply mean that they bankrupt us by moving their money elsewhere.

One response might be that it is not simply "their" wealth - the economic activity that gives rise to their profits takes place onshore and neither corporate barons nor City financial wizards are the sole creators of wealth but depend on hard working tax paying employees and customers (us) who don't have the option of dodging the Revenue. Another might be that these guys have done a pretty good job of bankrupting us already, although possibly this is an uncharitable view.

But either way their bluff can be called. Mr Murphy suggests the following ten point plan. The standard cop out is to claim that entities such as the Channel Islands represent the upmarket end of the spectrum and if the UK shut down the Crown dependant territories in the Caribbean the money would simply go elsewhere so we might as well let "our" pirates get on with it and continue cashing in.

But this is no argument. To say that if we didn't do it somebody else would is a fatuous soundbite that can be used to justify any nefarious activity from drug running to slavery. The only honourable response is so much the worse for them. Even supposing that at least some of the buccaneers remain in business it still makes sense to terminate as many as possible since the fewer that remain the easier it will be for responsible regulators to keep track of them. This in turn would enable the authorities to bring pressure to bear and over time force them to clean up their act, cease the most outrageous practices and mitigate the damage they do.

The Guardian journalist Larry Elliott has suggested that contracts or deals entered into in offshore jurisdictions or anywhere else in defiance of financial controls could be declared void in British law. This simply requires British courts not to do something - enforce contracts based in these Mickey Mouse microstates. The effect would be that Ground Control could quickly shoot down Goldfinger. There's not much point in dodging taxes if your offshore agent can walk away with your money without legal redress nor is there any value in having money in the Caymans if you can't get it out.

There remains the problem of how to persuade politicians and the public to support radical action. As Richard Murphy points out the sad fact is that Britain is one of the leading sponsors of tax havens/secrecy jurisdictions. Having allowed manufacturing industry to be decimated we are dangerously dependent on financial services and the temptation will be for Gordon Brown to keep on deferring to the City. However he is likely to become increasingly isolated.

We now have a new American president, Barack Obama, who has no time for tax havens. It was he who co-sponsored the Stop Tax Haven Abuse bill in the US Senate. On both sides of the Atlantic there is pressure from leading OECD governments to act and they are becoming increasingly weary of British obstruction. Since New Labour was prepared to take Britain into an illegal war to preserve the special relationship with George Bush, thereby sacrificing the lives of British soldiers and exposing London to terrorist attack it would be curious if Gordon Brown was prepared to break with Washington in order to preserve the fortunes of those who are determined to undermine HM Revenue and Customs.

So far Brown has been reluctant to commit himself but Darling has been making veiled threats to review the Isle of Man recently. Even in terms of low politics this is a potential chance for Labour to outflank the Tories. There is little chance that Cameron would endorse serious action but if there were a seriously nasty recession he might have problems explaining why he was on the side of offshore elites rather than the public.

Defenders of the status quo will try to portray the offshore world as a haven from predatory taxation. But the opposite is the case. The effect of enabling corporations and the super rich to avoid paying their fair share is to increase taxation on the rest of us or to pressurize governments either into cutting public spending or raising revenue by borrowing, which eventually has to be paid back in the form of future taxation or a rise in interest rates. There is no reason why even those people of a conservative disposition should approve of corporate oligarchs not paying their way. If taxes are felt to be too high, distorting incentives or holding back the economy the solution is for the public to vote for a government that will lower them, not to allow those at the top of the table to avoid paying their dues. It is worth noting that it was Oliver Wendell Holmes, the great nineteenth century American judge and leading member of the Republican Party who said that taxes are the membership fees of a civilized society.

At some point it is inevitable that taxes will have to go up to pay down the debt run up by the boys playing funny money games in the City and on Wall Street. Should Middle England or Joe Sixpack "buck it up" while the corporate elite, having been bailed out at our expense, refuse to pay their fair share, move their millions offshore and return once the recession hits bottom to buy up our properties and our failed businesses for a song? I don't think so.

But the final argument is not simply that indulging these malpractices is expensive and unconscionable. The secrecy of the offshore world is potentially a threat to national security.

There was a scandal in the late Nineties involving the use by Russian oligarchs of shell companies based in Cyprus, the Isle of Man and elsewhere. Russia's assets were sold to these shell companies at a fraction of their value and then resold on world markets for the real market price with the mafia clique allied to Yeltsin and his "Family" pocketing the difference. Meanwhile pensioners were left unpaid because the state had nothing with which to pay them and were left to freeze to death in their squalid apartments. Veterans of the Red Army, having helped to defeat fascism and protect us in the West from the full force of the Nazi juggernaut, were left to beg in the streets in their old age. How many died of grief, humiliation and despair? A long hard winter is a bitter counterpoint to the callous hard faced youths on the make and pretty predatory girls besporting themselves on a Caribbean beach.

Do the lords of the market count these human casualties in their phony statistics or is this yet another reality that they seek to keep off balance sheet? More faceless victims who fall into the chasm between what is said and what is done while the corporate barons play with their cigars and cars?

Needless to say, none of "our" financial watchdogs spotted this merry game for what it was. It was left to the New York authorities to trace this scandal back to its source.

Then to our utter surprise we find that Tsar Putin has no love for the west and London, that playground for the superrich and home of casino capitalism, gets a polonium sandwich in one of its restaurants.

It all connects.

Robert Clayton