NOT ON OUR BEHALF...

So David Cameron is to travel to Brussels for a major EU summit on the eurozone debt crisis. Both Germany and France are keen to have a new EU treaty which would include measures to stop a repeat of the problems threatening the euro's future. Cameron is under increasing pressure from the anti-Europe wing of Tory MPs who want him to resist moves to strengthen the power of Brussels over EU members.

The PM has pledged to stand up for Britain, he will display some of the tenacious bulldog spirit, etc. Some old same old you might think, but there is more to this than meets the eye. Not quite, in a joint letter, France's President Nicolas Sarkozy and German Chancellor Angela Merkel have called for the 17 eurozone countries to have common corporation and financial transaction taxes.

This is something Cameron (“the bankers friend”) is obviously set dead against. Cameron has cleverly hidden the real reason, why and on whose behalf he is actually going to the Brussels summit for, by playing the Tory patriotic card, saying he would fight for the UK national interest in any EU Treaty talks.

Cameron's real concern is the issue of corporation tax and the proposed financial transaction tax – something that could seriously hinder the effective money laundering that goes on in the City of London. The last thing Cameron wants is any bright light shone on the questionable financial practices that operate in and around the City of London. Cameron will be busy in Brussels acting on the banker's and the tax evaders behalf not on behalf of the inhabitants of these islands.

Interestingly enough, the previous New Labour government made much of its light financial regulatory touch, at least until the wheels came spectacularly off the wagon. It's a tad difficult for the Con Dems to make anything positive out of their refusal to take any action over banking regulation (at least until 2019). In the wake of the banking collapse and at a time of real financial austerity when we are all supposed to be in it together, this is pretty rich.

There is a real need to deal on a global basis with the problem of off-shore companies and those individuals who are actively engaged in tax avoidance, tax evasion and / or money laundering. The European transaction tax initiative favoured by France and Germany is long overdue and a small step in the right direction.

What a surprise! it turns out that the UK is at the heart of this problem as it has consciously chosen not to regulate some of its crown dependencies. The scale of the off-shore problem can take your breath away. The Cayman Islands; are currently home to some 12,000 corporations and have a population of 50,000, yet are home to 70% of the planets hedge funds.

The British Virgin Islands (population 22,000) is home to 823,502 registered companies. General Electric paid no tax in 2010, yet made a $14.2 billion dollar profit. Barclay's has 181 subsidiaries registered in the Cayman Islands and paid little UK tax on its worldwide profits. The Dirty Digger's News Corp has 152 subsidiaries in tax havens across the planet (according to the US Government) and paid no UK corporation tax between 1998 and 1999.

So much for all being in it together, if developed countries exchequers lose out then it's significantly worse for developing and underdeveloped countries. Tax dodging costs developing countries around $160 billion dollars per year (Christian Aid). Around $ 1.2 trillion dollars was illicitly removed from poor countries in 2008 (US Integrity Research Centre).

President Obama rightly suggested that the governments of the world actually got together to tackle the issue of tax evasion and tax havens. The US President was entirely correct, if we actually tackled the tax havens, the tax avoidance and the questionable dealings of the derivative traders, hedge funds and the off balance sheet trading then we might go so way towards dealing with the consequences of the worldwide financial crash.

There again, perhaps if that nice Mr Cameron and the other 18 millionaires in the cabinet were to work with other governments worldwide to close the tax loopholes then perhaps we truly would all be in it together? Perhaps not! So over the next few days when Dave (and no doubt the Daily Mail) makes much of standing up for Britain in the Brussels summit its worth remembering that he is actually there on the bankers behalf not ours.