It was only in October last, not long after Chancellor George Osborne had altered the stamp duty on property sales, that Scotland’s Finance Secretary and Deputy First Minister, John Swinney, produced his proposals for Scotland’s Stamp Duty.
These proposals, whatever their merit, seemed to be driven mainly by the political need to be seen to be different from ‘England’.
It wasn’t long before rumblings from market professionals were identifying a serious problem – one which ought not to have happened, given the nationwide problems made publicly known with the Mansion Tax, first mooted by the recently deflated Liberal Democrat Ego, Vince Cable.
While Mr Swinney’s proposals valuably made things easier for first time home buyers, the threshold he had chosen for a markedly greater tax take was £325,000. as property sales professionals like Slater Hogg Hewison were quick to point out, there are plenty of parts of the country where houses from £325,000 to £400,000 are far from luxury houses.
This meant that a young couple with a family looking for, say, a three bedroom, semi-detached house near a good school, in places like East Dnnbartonshire, East Renfrewshire, Edinburgh or Aberdeen, would feel financial pain from this.
This demographic is the market Scotland needs to earn the money for the enhanced social costs which have been promised. It is also a demographic whose members are prepared to move and re-establish themselves at this time of their lives, to protect their lifestyles and the futures they plan for their children.
A director of Glasgow Solicitors Property Centre, described the proposals as: ‘… victimisation politics’, ‘deliberately or ignorantly punitive of those who have worked and saved hard, are aspirational or even just have larger families’.
With concerns already being openly expressed on the impact the proposals could have on a key element of the engine of the Scottish economy, Audit Scotland published a report identifying serious problems in the state of readiness of the new Revenue Scotland. This is the agency tasked with collecting the new Land and Building Transaction Tax and landfill tax – supposed to go live on 1st April.
Audit Scotland pointed specifically to problems with the IT systems and with resource planning. principally in relation to management and operational structures and the consequent specification of precise staffing needs.
As the criticisms mounted of the economic impact of the new tax itself, it was gently leaked to the media in the last week that MR Swinney was thinging again and was to produce revised proposals for the forthcoming budget.
With the collapse of the oil price and the resulting crisis in the North Sea sector, of a scale Scotland alone could not hope to address, having to revise his new property tax before it has even begun is not where John Swiney would ideally have wanted to find himself in advance of the May UK General Election.
But it is always good strategy proactively to head potential disaster off at the pass – and this is what the Finance Secretary has done. He has rightly preferred to take the flak for having got it wrong first time out – but fixing it before it causes actual harm.
It is a rare politician who has what it takes to do this. It highlights the often mindless culture of apportioning blame simply for changes of mind, when such changes are usually signs of the alert learning we need in our managers at every level.
There is no doubt that the approaching election will have improved Mr Swinney’s ability to learn better on policies that would have cost votes – but beyond that, he has shown again that his tactical judgment is sound and that he possesses personal courage.
The political reactions to the coming change have been joyfully fitted in rocket launchers by opposition Ministers, with Labour’s Shadow Finance Secretary, Jackie Baillie scoring heavily.
Noting that it has been only 100 days since Mr Swinney published his proposals, she noted that,having had to change them in short order, he seemed to be moving ever closely to the Conservative prospectus. Ouch.
The lesson to be learned from this change of tack though, is that any strategy is best addressed to the issue in hand and not governed by the primary will to be seen to be different from ‘England’, per se. That is embarrassingly small.