Hansard

Thank you, Presiding Officer, for the opportunity to speak for a few moments on the proposal for a cut to land and buildings transaction tax. I start from a position of accepting that, when introduced, LBTT was a modest improvement on the stamp duty tax that went before it. However, it remains a flawed system that is inefficient, creates unwelcome consequences, is not progressive and should be replaced with a more modern system of property taxation, as the Mirrlees report recommended nearly a decade ago.

Even if the tax cut that is being proposed was seen in isolation, I would question whether a tax cut that is directed at those with the wealth to buy a £250,000 home should be a priority at the current time. There are surely people who are more in need of help and to whom the resources that are paying for the tax cut could be directed. At the Finance and Constitution Committee, I asked the Minister for Public Finance and Migration what tax policies that could have benefited those in greater need were considered as an alternative. He told me:

“Those are questions that we all need to ask ourselves”,—[Official Report, Finance and Constitution Committee, 19 August 2020; c 6.]

but he offered no answer. I can only assume that he did not consider any alternatives at all.

Of course, we do not see that policy in isolation; we cannot help but see it in the wider context of housing and the property market. That gives us more reasons to oppose it. As the Scottish Fiscal Commission sets out at paragraph 1.14 of its report, the tax cut will lead to an increase in prices. Why would it not? With less tax or no tax to pay, but with the same overall budget to spend, buyers will simply be in a position to bid a little bit higher for the property that they want to buy. The argument is not new. It is well understood that that kind of consequence will arise from such tax cuts. That is why the Fiscal Commission made that prediction. The minister accepted that when he moved the motion on the SSI at the committee.

At the same time, the Scottish Government is continuing to increase so-called help-to-buy schemes for first-time buyers. That is another measure that will have the same effect—both directly and indirectly—of driving the cost of housing ever higher. At both ends of the market, Government policy will drive up prices when we should be doing exactly the opposite. We should be seeking to reduce the underlying cost of housing rather than pouring more money into the system, which will inflate prices further.

Why is that being done? It appears to be an almost unthinking response to a United Kingdom policy change. We should not be following in lockstep with the tax policies of a right-wing UK Government; we should not be directing tax cuts at those who need them the least; and we should certainly not be doing so in a way that makes the problem of high housing costs even more severe. We should be following through on the long-overdue reform of local taxation and replacing an outdated and perverse system of property tax with a modern alternative. That is why the Greens will oppose the measure tonight.