Chamber and committees

I accept what you are saying. In future reports, would you be prepared to actively consider culture as specific and measurable, for the reasons that we have outlined?

In your evidence thus far, it sounds as though the position is very complex, and the data that you have cited probably confirms that we are not entirely certain of the impact of the rise. Therefore, to pick up on the issue that the convener was probing earlier, is it reasonable and accurate to say that we do not have complete transparency—probably for a very good reason—about the impact of the original rise in ADS and that you therefore have not been able to model the potential impact of a subsequent rise from 6 per cent to 8 per cent?

Okay. Convener, I should have drawn committee members’ attention to my entry in the register of members’ interests.

If I may, I will follow up one area in relation intra-landlord activity. There is evidence that, over time, quite a number of landlords have exited the market across the whole of the United Kingdom. That was triggered by the UK Government’s withdrawal, some years back, of mortgage interest tax relief. More recently, some landlords have been choosing to exit the market but to sell with the tenant in situ, so that another landlord buys the property. That is done for the very good reason that the property is somebody’s home. Surely a by-product of the increase in the rate of ADS will be more tenants being evicted, because a landlord will be less likely to buy properties. To what extent have you factored that consideration into any scenario planning that you have done?

I will move on to my next question. I have not seen culture mentioned specifically in your report. It is a very good report, but the reference to culture is implicit, rather than explicit, in some of the commentary, such as that on transparency and leadership, for example.

Considering your understanding of the culture that prevails and that you have seen, how confident are you that changes can be made, given that the best predictor of future behaviour is past behaviour?

I do not know the names of the companies concerned, but I asked the question because I am aware that there has been increasing activity in landlord-to-landlord sales, which keeps tenants in place. Of course, at that point, the landlord is knowingly and deliberately taking a cut in what they might be able to achieve on the open market, to allow the tenant to stay in situ, and rightly so. However, this measure could discourage investors from coming to the table. Therefore, it would be worth while to look into that.

Yes, although the evidence of the impact of the previous increase from 4 per cent to 6 per cent does not necessarily follow with regard to the increase from 6 per cent to 8 per cent. It is your view that that might be the case, but we do not actually know that and the only thing that we could be certain of, if we did projections, is that they would be inaccurate. I ask about that because I want to know how you can evidence your assertion that the increase will support first-time buyers rather than merely fulfil the intention to increase the tax take? I am not against that per se, but is it not quite a bold statement that the increase in the rate of ADS will necessarily lead to more first-time buyers being able to access property?

Correct.

If you do not mind me saying so, you are almost making my argument for me. My argument is that such a cultural shift will take place. Of course that is happening, but there is a financial cost to it. This is not your bog-standard bill. I am glad to hear that that is happening because it is extremely important but, given that it is happening, the work that will require to be done across the whole range of things that we have covered today will probably be more expensive, because it goes into areas that people might not necessarily have thought about previously. It is quite a big shift.

I am intrigued by your comment, Sandy, and I have to say that I do not disagree with you. However, to what extent do you think that the complexity around public sector reform is understood? My perception is that the conversation has coalesced around the need for it, but that is arguably the easy bit, and, as soon as you start talking about the how of it, the issue suddenly gets complicated and will bring up the question of priorities, which is what John Mason was alluding to. As someone who is across a lot of this stuff, to what extent do you think the discussion is starting to mature in a way that involves the consideration of complex issues as well as issues of cost?

I will probably be quite quick. I have been listening with interest to all the questions thus far, and I have just a couple of questions. First, I want to explore a bit more the extent to which you have considered such a significant culture shift and how risk is managed within it. Earlier, you mentioned a level of peer support for people who are administering it. When people think about being involved in such events, they often say, “If I was to do that, this is how I would behave”, but the truth is that people do not really know. When it is the antithesis of the Hippocratic oath that medical professionals undertake, how they will react remains uncertain. My first question is therefore about trying to put a number on such a significant culture shift, given that antithesis to the Hippocratic oath.

Secondly, on risk, we have talked about safeguarding, but we have not looked at it from the point of view that any organisation that is worth its salt would make sure that it buttoned down its processes to protect itself from any kind of legal challenge.

To get both of those areas right could introduce extra costs. We are talking about this as though all things are equal, when it is a dramatic shift for what is quite a small-c conservative country—Scotland. I want your reflections on how actively you have considered both of those elements as part of the financial memorandum.