I have the following letter in the London Evening Standard today in response to a comment made yesterday by Anthony Hilton that Gordon Brown has run a dual track economic policy:

Gordon Brown has indeed run a dual economy: one for the people and companies of the UK; another for the itinerant people and companies he wanted to attract here. Those from the UK saw their taxes increase. Those who came here got offered a tax haven.

The reason was simple: Brown ran trade and government deficits, and needed hot money to keep the economy and sterling going. This policy has now unravelled. The itinerants realise their importance and are now holding the Government to blackmail.

The trouble is that neither Brown nor George Osborne show any understanding of this consequence of globalisation. Because both declare their commitment to UK sovereignty on tax they seek to fight a global opponent on two fronts. They offer some a reduction in the tax base, and hope to keep others here by reducing the tax rate. They should know that all generals who fight on two fronts lose.

This is not a time for micro-managing taxation. Politicians need to realise the world of tax has changed forever and only by international cooperation can tax avoidance be beaten.

Richard Murphy, Director, Tax Research LLP.