Leading article: The Chancellor's missed opportunity

Political pragmatists will say that George Osborne has done a good deal in getting Swiss banks to levy what is effectively a tax on secret accounts held by British citizens. It should net the Treasury around £5bn. But the truth is this is a dubious deal that allows tax dodgers to pay less than they would in UK taxes, go unpunished for the crime of tax evasion and keep their identities from the taxman.

A much better alternative was in the wings. The revised European Union Savings Tax Directive has received the approval of 25 EU states and others could have been brought to agreement. The directive would have required an automatic exchange of information on income from interest and capital gains throughout Europe, Switzerland, Liechtenstein and Britain's tax havens.

The lower-grade bilateral deal with Switzer-land has effectively scuppered that. For all Mr Osborne's rhetoric on being "as tough on the richest who evade tax as those who cheat on benefits", he is letting tax dodgers off lightly. Why? Although tax evasion costs the Exchequer about £14bn a year, large amounts of cash enter the UK economy through tax havens like Jersey, Guernsey, the Isle of Man and the Cayman Islands. And the UK mainland is a tax haven for people of foreign domicile; even if they are resident here, they pay no tax on income not remitted to the UK.

Those who favour tax havens argue that they are an impetus for economic growth, sound fiscal policy and individual freedom. But there is a difference between tax regimes, which assist open commerce, and those that are so deliberately opaque that they hide the spoils of cheating, fraud, corruption, terrorism and drug-dealing. At a time when jobs of low-paid public-sector workers are being sacrificed, the Government should be doing more to make the rich pay their fair share.