Regardless of its likely ineffectiveness, a proposal to exempt individuals from paying the duty was always likely to have very serious immediate effects on the market.

As anyone with an understanding of the market could have predicted, the market seized up this week as homebuyers held off in expectation of a cheaper deal.

Beyond providing more evidence that the government is on its last legs, what can politicians learn from this experience, so that they might not repeat it? One key thing is not to play politics with tax. All the evidence suggests that Number 10 briefed the policy to journalists as part of yet another ‘relaunch’ of Gordon Brown’s premiership. Politicians should realise that such initiatives fail every test in trying to convince us that they are acting in our best interests. Throw money at a failing market doesn’t work, and it will also be seen as yet another cheap giveaway.

National politics aside, there is a more important issue for tax advisers. The Treasury needs to regain some of its self-respect if it is to form any durable tax policy going forward.

When the story emerged, Alistair Darling and Treasury officials passed the buck, saying they did not brief the policy, and blamed it on media speculation. Whether or not it is to blame, it is certainly responsible. An effective tax policy and an economy functioning in an orderly manner is the Treasury’s raison d’etre. Darling and his officials should have denied having any plans as soon as possible.

The tail-end of this administration looks like being very messy for the Treasury, and for the tax profession as a whole.

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