AS DEBATE over the Smith Commission continues to dominate the political agenda in Scotland, the Chancellor’s Autumn Statement provides a timely reminder that the devolution of powers can have unexpected consequences.
Take the reform of stamp duty. Earlier this year, using powers devolved as part of the Scotland Act (2012), Scottish finance secretary John Swinney announced the SNP’s plan to replace the controversial levy with a new Land and Buildings Transaction Tax (LBTT).
Under the new rules, which come into force in April, those buying a house for less than £135,000 in Scotland will pay no tax, while those buying a house for between £250,000 and £1 million will pay 10 per cent, and those buying a house for more than £1m, 12 per cent. The move was designed to make life easier for first-time buyers, although some criticised its punitive impact on the middle classes.
Yesterday, however, George Osborne pulled the rug from under the SNP’s feet, by announcing similar reforms for the UK. As a result of his changes, which began at midnight, those buying a house for less than £125,000 pay no tax, while those buying a house between £250,000 and £925,000 pay just 5 per cent.
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The Chancellor’s announcement means there is likely to be a rush as Scottish buyers looking for houses in the £250,000-£925,000 bracket try to save themselves tens of thousands of pounds by closing a deal in the four months before LBTT is introduced. After that, they will have to reconcile themselves to paying double the tax of their English counterparts.
So where does this leave the SNP? Mr Swinney described LBTT as “progressive and fairer”, but will he be comfortable knowing the Scottish system is harder on the middle classes than the English system?
Purists will argue the whole point of more fiscal autonomy is that Scotland should pursue its own course without constantly looking at what is happening south of the Border. Our housing market, after all, is radically different to England’s. The average price of a house in Scotland is £200,000 compared to £272,000 down south. Far fewer people in Scotland will buy houses in the £250,000-£925,000 bracket, and only a tiny proportion will buy houses over £1m (although even here there are hot-spots such as Aberdeen). However much we acknowledge the differences, though, it’s human nature to compare ourselves to our neighbours and to resent it if they appear to be getting a better deal.
As it lobbies for more fiscal autonomy, it is incumbent on the SNP to show Scots it will work to their advantage, but it is difficult to do that while the Chancellor is trumpeting lower taxes for middle class house buyers south of the Border. With more powers heading our way, and more of these discrepancies likely to arise, we will have to get used to the idea that tax-raising powers sometimes come at a cost.
SNP must douse its firebrands
AS EXAMPLES of stating the obvious go, Nicola Sturgeon’s pronouncement on the SNP councillors who filmed themselves burning copies of the Smith Commission recommendations then posted it on YouTube takes some beating.
“My clear view is that setting fire to something you don’t agree with is not acceptable behaviour,” the First Minister said. Given that the Smith Commission was a collaborative exercise at which the SNP was represented, and that the publication of the report followed on from Ms Sturgeon’s tour, the mantra for which was “democracy rocks”, this might seem like an understatement.
That she had to say it at all –that anyone in her party could have thought, even fleetingly, that this was an appropriate way to express their dissatisfaction – is an indication of how febrile the atmosphere around the constitutional question continues to be two and a half months after the referendum.
Since 19 September, the word “betrayal” has been tossed about on social media sites. The notion that Yes supporters were deprived of their rightful victory and that the Smith Commission is an extension of a conspiracy perpetrated against them, has become common currency among a certain section of the independence movement.
But if the SNP is not to be brought into disrepute, its more volatile members must exercise self-restraint. As Ms Sturgeon said: “Many people are disappointed…however, Scotland will only make progress if we debate our views openly and with respect.”
The councillors in question have been suspended, and rightly so. It is vital Ms Sturgeon sends out a clear message that such cheap stunts will not be tolerated.
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