Like more or less everyone, I was greatly surprised by the attack on Bermuda's reputation unleashed by the British this week. No one who knows anything about the matter would have made such intemperate comments: Bermuda is very much in the vanguard of adopting international standards of governance and anti-money laundering regulation.

In case you missed it, the chairman of the British Committee of Public Accounts (CPA) said that Britain should take charge of financial regulation in its overseas territories to avoid being liable for lax standards of financial regulation.

The CPA, this newspaper reported, said "Bermuda had hired more regulators since 2000 but concerns were raised that some public bodies had accounts that were up to six years in arrears while there were delays to the public pension and insurance fund which controls approximately $1 billion of assets."

On that score, but only that one, the British were correct. The state of filing of some of the smaller Bermudian public bodies is indeed "appalling". The Ministry of Finance is at fault, although few in the present Government believe in its oversight function. This is the crew, you may recall, that moved the Auditor General's office into the middle of Reid Street one afternoon, a Government with a Minister whose response to constitutionally mandated criticism from the Auditor General was to publicly humiliate and arrest him.

The Bermuda Government should not shoulder all the blame, however. For one thing, the CPA based its views on five-year-old information. For another, the report was issued without members of the Committee bothering to visit the Island or making any other efforts to check their facts.

It's also worth remembering that more money is laundered in London on any given afternoon than is laundered in Bermuda in a year. Our economic volume is tiny compared to theirs, and we actually know our customers, whereas in Britain the term "know your customer" refers only to paperwork.

The real reasons for this astonishingly ill-informed outburst by the British have very little to do with Bermuda and its present state of regulation.

First, Gordon Brown's Government is proving to be a catastrophe. This would come as no surprise to anyone who has followed Mr. Brown's career. Incompetent does not begin to describe him. He has consistently fudged the UK accounts, burying stuff off the balance sheet to make his policies look good, raising taxes to destroy what little initiative remains, and transferring special privileges to his Scottish countrymen at the cost of the long-suffering English. Mr. Brown alone was responsible for the Northern Rock fiasco, one that will cost the British taxpayer more than $30 billion.

Oh well, you say, they voted for him, so they deserve him. No, they didn't. Mr. Brown took office because of a fear that Tony Blair might damage the Labour Party's electoral prospects. Nothing Mr. Blair could have done would have come close to the damage Mr. Brown has achieved.

And so the British report happened to come out just as the Labour Party was taking the pasting of a lifetime at local council elections, which may have seen Ken Livingstone dethroned as Mayor of London. (I write this before the result of the election is announced on Friday night.) Mr. Brown's general haplessness, however, is of little concern to Bermuda. He will be voted out of office whenever he is forced to call the next general election, and history will record that he was the worst leader the country ever had. Of greater concern is the concerted attack on the offshore community being delivered by the morally bankrupt onshore regimes. It's coming at us from all directions; it's not going to stop; and by all the portents, offshore will go the way of the dodo.

We face a global recession. Tax bases are being eroded, as companies and individuals realise that organising themselves in tax-happy and inefficient places such as most of Europe and the US is a recipe for failure. Unable to raise sufficient money from taxing their home populations to the bone, onshore administrations have looked with greedy eyes at the offshore world, where low taxation encourages individual and corporate effort, and where some $12 trillion now reportedly resides.

Since adopting a low-tax structure is out of the question for tax-mad fools such as Mr. Brown, the only alternative appears to be to force the offshore communities out of existence. Mr. Brown is not alone in coming to this conclusion.

Barack Obama and Hillary Clinton have both vowed to punish Bermuda if either is elected US President in November. Mrs. Clinton promises a $7 billion "insourcing" programme, and Mr. Obama is vigorously promoting the Stop Tax Haven Abuse Act, whose title tells you all you need to know.

The OECD, that bastion of bullying bureaucrats, is beating mercilessly on Monaco, Liechtenstein and Andorra, the last three countries to have retained the courage of their convictions in maintaining confidentiality and privacy for their economic clients. If a Belgian dentist cheats on his taxes, who should be punished? Not the dentist or the Belgians, the OECD believes, but the perfectly legal regimes in every country in the world in which the dentist may have deposited his dough.

The Germans and the British, unable to crack the secrets of Liechtenstein, decided instead to obtain the information they needed illegally. So when a former employee of a large bank in Liechtenstein stole a copy of the bank's hard drive, the British and the Germans paid him millions for copies. That makes Mr. Brown and Frau Merkel's regimes accessories to a crime, but after all, who can prosecute governments?

Make no mistake: the squeeze is on. I have no idea how long it will take the tax fascists to close down the offshore community, but I know this much: your grandchildren won't have a clue what offshore once meant; they'll pay taxes through the nose; and not a single one of the "small island nations" (to use the words of Evan Greenberg of Ace, when he announced that he was moving his holding company from the Cayman Islands to Switzerland) will have a financial services industry.

As the OECD has repeatedly shown, it will brook no opposition in its drive to eliminate the livelihoods and crush the spirits of those of us in the smaller nations. No matter that all available evidence shows that the greater the tax, the less the yield. No matter the facts of any stripe; the OECD — made up of the Europeans, the US and other operators of failed high-tax economic models — has set its heart on destroying Bermuda and its ilk. God help all of us.