The chancellor's statement has for once given Westminster the upper hand over Holyrood.
The chancellor’s statement has for once given Westminster the upper hand over Holyrood
In his response to yesterday’s Autumn statement, Scottish Finance Secretary John Swinney argued that Scotland was paying the price for UK wide austerity.
The chancellor’s statement has, however, put the SNP in a difficult position, perhaps for once giving Westminster the upper hand over Holyrood – all over the issue of stamp duty.
In October, Swinney announced that using powers devolved to the Scottish government under the 2012 Scotland Act, he would be abolishing stamp duty altogether, in favour of a new Land and Buildings Transaction Tax (LBTT).
Due to be introduced in April, in would mean no tax would be payable by those buying a property for less than £135,000.
Those, however, buying a house for between £250,000 and £1 million will pay 10 per cent, whilst those purchasing a property for over £1m will pay 12 per cent tax.
In its editorial this morning however, the Scotsman has declared that the chancellor has ‘pulled the rug from under the SNP’s feet’. The paper explains:
“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.
“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.”
Whilst John Swinney has said of the stamp duty plans south of the border that ‘imitation is the sincerest form of flattery’, the reality is that the SNP’s plans will leave more people worse off. Little wonder that the Scotsman today concludes:
“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.”
Meanwhile, the SNP’s dreams of an economy based on the black gold seem dashed yet again with predications by the Office for Budget Responsibility of further falls in revenue from North Sea Oil.
Writing on his blog, BBC Scotland’s Business and Economy editor Douglas Fraser notes:
“According to the Office of Budget Responsibility, with its Autumn Statement publication, the forecast for offshore oil and gas tax has been cut by a five-year total of £4.5bn.
“The biggest shortfall it foresees is next year, down from £3.8bn to £2.2bn. That’s partly down to the writing-off of high levels of investment that have been ploughed into the industry in recent years. Investment is near certain to fall, and so will the use of tax allowances.”
Ed Jacobs is a contributing editor at Left Foot Forward. Follow him on Twitter
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