Seòmar agus comataidhean

Yes, on you go.

Will the member give way?

Does the member accept the argument that the cost of the cladding programme will be hugely greater than the levy and that, therefore, the levy will easily be swamped by the whole programme?

I want to pick up on something that Ms Scott said. She partly answered what I was going to ask, but my question is about public understanding of the tax system.

Ms Scott, you suggested that the committee could challenge the Government on that point. Who is responsible for improving that understanding? The Fiscal Commission has done some work on that, and so have the FAI and Professor Bell, but what should we say to the next finance committee? Should it challenge the Government or the SFC harder, or should members speak to witnesses differently when they come before the committee? Would that make it easier?

On local government finances, I think that everybody here has accepted that there is a problem and that it is very difficult to revalue or whatever. However, as I understand it, the aim of this evidence session is to come up with a recommendation for our successor committee. What are we going to say to that committee? I aim this at the Auditor General for starters. Are we going to say to future committee members that there can be no change because revaluation is too hard and that they should just forget about it? Are we going to say that they have to push for revaluation? Are we going to say that they have to push for a new tax?

Is that another intervention?

Different places are different, and I think that the minister is going to say that the Government will look at different rates in different areas. It is about the principle, however. There are hotels being built—as I said, I accept that it is not a huge number, but I saw in the media last week that there is a piece of land in Edinburgh that was possibly going to be used for housing, and it now looks like it will be used for a hotel. Under the bill, we will have a slightly strange situation in which we will have housing competing with a hotel, and the housing will have a levy on it but the hotel will not. It could be seen that we were favouring the hotel over the housing, which strikes me as slightly odd.

I will just speak to amendments 17 and 18 in my name, which both deal with exactly the same subject: whether hotels should be included in the scope of the levy.

I accept that there may not be a huge number of new hotels being built around Scotland every year, but if we want to widen the tax base—because the danger is that, with all the exemptions, it is narrowed too much, as the minister said—we should take the opportunity to include hotels in there, on the basis that we want the tax to fall on the people with the broadest shoulders, who can afford to pay. It has to be said that many people who stay in hotels, either for business or as tourists, can afford to pay a little bit extra.

My assumption with regard to the bill is that it will be the final user—the house purchaser, the hotel resident or whoever—who will end up paying for the levy, and I am perfectly comfortable with that. I think that most people staying in hotels could probably afford a few extra pounds; certainly the cost of a hotel in Edinburgh is excessive.

Could I ask that you give the result of the vote each time?

Were the respondents mainly from the industry or potential house buyers?

Once again, I will speak to just my amendments—amendment 25, with the rest being consequential—which are all about one point. The basic point is to ask whether it is the value or the floor space of a house that would provide a better basis for the levy.

We should want all taxes to be as fair and progressive as possible, with the heaviest burden falling on those who have the broadest shoulders. It would be better to use the value of the house rather than its floor space as the basis for the levy. As things stand, using the floor space would mean that two properties of the same floor space but with different values would pay the same levy. A mid-terrace property in a poorer area will command a lower sales value than a detached bungalow or a smart flat in an upmarket area, and properties in the second category should surely pay more than those in the first.

Yesterday, I had my staff look for some examples. They found an example of new homes that have been built by Barratt Homes—I might as well say which developer it is. The houses are exactly the same, with the same description and everything, but they are being built in two different places: one is being built in the west side of Edinburgh, and the other is in Robroyston in Glasgow. The Glasgow house is selling for £273,000 and the Edinburgh house is selling for £370,000. That is a difference of 35 per cent, yet the levy would be the same for both houses, which seems strange. However, I accept that there are practical issues with whichever method is used, and, however we do the levy, section 9(5) will require regulations.

We heard in evidence that there are questions about how common areas would be dealt with under a floor space system. I also wonder what would happen if a house were to include an attic or a loft. That would presumably not initially be included in the floor space, but it could perhaps easily be converted into a bedroom by a new owner. Therefore, there will be loopholes with the floor space system, although I accept that there could also be complications with a valuation system.

It has been argued that using a valuation system would provide less certainty for the builder or developer. However, my thinking is that the sales price would normally be the same as the value, and I understand that the selling prices of new properties are generally fixed early on; indeed, people sometimes buy a house at a fixed price before work on the house has even started. Those factors would be easily known to the developer and should not pose a major hurdle.