One of the problems with the SNP Government in Scotland is there are very few people within it who understand the private-sector economy. There are many who have public sector, media or legal skills but not those of business – they understand how to spend money but not how to make it.

This means they don’t really know what creates economic vibrancy. They think it is about setting up new entities stuffed with highly paid people to “help” or to licence and regulate businesses to do the right – usually green – thing.

People in the private sector may be motivated by many things but their prime objective is to make money. That’s not a bad thing. It is a good thing because companies make money by using resources efficiently, being effective and satisfying customers well – and in so doing they create the wealth on which we rely for our jobs and public services.

What our Government needs to understand better is what economic vibrancy looks like – it is not always pretty – it means some people having a higher standard of living than others, it may mean conspicuous spending as well as investment, it almost certainly means asset prices rising – including the price of the house you would like to buy but now can’t.

These economic signals, in particular rising profits and asset prices, are vital to a well-functioning economy. They indicate to the private sector that more resources should be deployed to that area of activity. The Scottish Government instinctively doesn’t like this – because it doesn’t understand it or control it. It feels more comfortable with the state directing things – despite the evidence from all round the world that too much direct engagement by the state in economic activity does not deliver good results.

Let me give you one current example on which the Scottish Government’s instincts are taking it in entirely the wrong direction.

Scotland is a highly attractive place for tourism but, except in places like Edinburgh and some isolated outposts of excellence, it has historically failed to provide the quality of accommodation in rural areas which maximises our tourism potential and creates the jobs needed to maintain economically and socially sustainable communities.

Luckily over the last decade there has been a transformational increase in the availability of privately-run accommodation to fill that gap. Private investors have bought houses in rural areas, in many cases not in the best state of repair, and invested in them to create good-quality self-catering accommodation and B&Bs.

Instead of seeing the positives in this – more spending, more jobs, more taxes – the SNP Government has reacted to the rising price of rural housing by proposing a heavy-handed licensing regime for tourist accommodation which will badly damage the rural economies it purports to want to help.

As well as a muddled understanding of what the rising house prices mean – rising prosperity – they want to stop that rise and they pull precisely the most damaging lever to do so.

The issue of housing availability in rural areas and its affordability is not best addressed by destroying, through over-regulation, the hospitality industry and the jobs it creates – that might seem rather obvious but it will be the consequence of what the Scottish Government currently proposes to do.

The solution lies on the other side of the equation - dealing with inadequate supply, which is a problem, rather than demand which is not.

Investment by the private sector in creating tourist accommodation in rural areas is to be encouraged, not discouraged. What the Scottish Government needs to do is enable more supply of houses in rural areas – by compulsion to release land for building if need be. Private-sector investment which creates jobs, coupled with an increased supply of new homes , is a combination which will help create more vibrant rural communities.

Guy Stenhouse is a Scottish financial sector veteran who wrote formerly as Pinstripe