The trouble is, these tax havens need our money

Every time I investigate dodgy companies or billionaires’ ill-gotten gains, I play a little game: to which beautiful tropical destination will the paper trail lead this time?

Belize (a Russian property thief living in Belgravia)? The Seychelles (Viktor Yanukovich, the deposed president of Ukraine)? Panama (a syndicate routing cash through Moldova)? Mauritius (the crooked City currency trader)?

They are the go-to destinations for people who want money to disappear from the gaze of the taxman, the police, or business rivals and out-of-favour spouses.

Having already raced to the bottom of the tax rate tables, with zero per cent in most places, they now compete to be the least regulated and most secretive, too.

As such, it’s easy to think ill of them. Why on earth should we give British taxpayers’ money to the very countries who help our billionaires pay less tax?

But we should not be so fast to condemn – either Whitehall for donating to these places – or the countries themselves for setting themselves up for tax avoiders. Most are poor places. Liberia – reeling from the Ebola outbreak, Montserrat – two thirds of the island still an exclusion zone from the volcano disaster, Belize – where a third of the rural population lives in poverty.

As they search to expand their economies away from fishing and tourism, who are we to blame them for settling on financial services and tax avoidance? Particularly as it was the world’s investors in capitals like London, Paris and New York who encouraged such havens in the first place.

We could threaten to reduce our aid if they don’t tighten up – the Australians have done this with cyclone-prone Vanuatu. But it seems harsh. Far better, surely, to take tougher action here in the west to stop the big tax avoiders moving their cash offshore in the first place.