By John Sweeney
BBC Panorama reporter
Her Majesty's government is broke - a record £44bn in the red - and yet one estimate is that the taxman loses £18.5bn a year thanks to tax haven abuse.
In the past, the political will in Westminster to move against British protectorates such as the Bounty Bar island tax haven of the Caymans in the Caribbean and the fish-and-chip tax havens closer to home like Jersey, Guernsey and the Isle of Man, has been feeble.
But now that may be changing thanks to tough pressure from the new man in the White House and a drip-drip of revelations from tax havens, both independent and British-protected, that undermine bland assurances that everything "off-shore" is good for everybody "on-shore".
Liechtenstein, the Alpine "off-shore" microstate sandwiched between Austria and Switzerland, was an international pariah after being placed on a blacklist of the three worst offending tax havens, along with Andorra and Monaco, by the Organisation for Economic Cooperation and Development.
Now it has been knocked sideways by revelations from a whistle-blower, Heinrich Kieber.
Kieber was a lowly IT worker charged with copying thousands of client files at LGT Trust (LGTT), part of the banking group controlled by Liechtenstein's ruling royal family.
In 2001 he stole electronic disks containing information on those clients and sold them to German intelligence, the BND, for five million euros.
This week, Klaus Zumwinkel, disgraced former boss of the German Post Office, became the first big name to be convicted of tax evasion thanks to Kieber's evidence.
He was forced to pay back 3.9m euros, was fined one million euros and given a two-year suspended jail sentence.
Named and shamed
Now millionaires and tax cheats around the world, including 150 punters in Britain, are being investigated because of Kieber's stolen disks.
Liechtenstein's tax-haven's super-rich customers may not have enjoyed the activities of the United States Permanent Sub-Committee on Investigations, which last summer used Kieber's data to name and shame American citizens who had put money into LGTT trusts.
US citizen Peter Lowy, son of Australian billionaire shopping mall developer Frank Lowy, who developed the Westfield Centre in London's Shepherd's Bush, pleaded the Fifth Amendment when he was asked about the off-shore foundation LGTT set up when part of the Lowy American business empire was being wound up.
The Lowys say "net proceeds" were donated for charitable purposes in Israel and they have supplied bank statements and receipts to the Australian Tax Office to verify this.
They also say "none of the Lowys received any personal benefit" from the off-shore structure in Liechtenstein - and no tax was avoided or evaded in Australia or the US.
While reporting for BBC's Panorama programme in Vaduz, I managed to catch up with a member of the Liechtenstein royal family, His Serene Highness Prince Nikolaus Von Liechtenstein.
He was attending an openness seminar at the university in Vaduz. This being Liechtenstein, it was closed to the BBC's camera.
Kieber, who has something of a murky past, was placed on an Interpol wanted list by the Liechtenstein authorities.
However, Kieber's American lawyer is rather rude about the royal house of Liechtenstein:
"If the family business of the absolute monarch of this place is a felony, you don't have a country, you have a criminal enterprise," he told me.
I put that to His Serene Highness: "In America, Kieber's lawyer, Jack Blum, says that the Liechtenstein royal family by aiding and abetting tax evasion are effectively crooks. So the question is: are you a crook, sir?"
The prince replied: "It is very clear that every country has its laws. America has quite different tax laws than Liechtenstein. If I evade taxes in Liechtenstein I have to pay a higher tax but I have no criminal prosecution. Only if I make tax fraud that is say I, I falsify documents, then I am also a criminal in Liechtenstein so we have a difference there."
As the credit crunch threatens worldwide recession, the patience of the great democracies in America and Europe, including Britain, to tolerate tiny microstates like Liechtenstein continuing to undermine their tax-raising powers may be ending.
But 18 of the world's tax havens are Crown Dependencies like Jersey, Guernsey, the Isle of Man or British protectorates like the Caymans, a fag-end of the British Empire in the Caribbean.
One man has targeted tax haven abuse in the Caymans - and his name is Barack Obama. So change for the world's tax havens seems on the way - whether the leaders of the micro-states like it or not.
Panorama: Tax Me If You Can, BBC One at 2030 GMT on Monday 2 February.
HM Treasury Pre-Budget Report
UK tax evasion hotline