The next item of business is a debate on motion S6M-06178, in the name of Patrick Harvie, on the Cost of Living (Tenant Protection) (Scotland) Bill at stage 1. I remind members that I will put the question on the motion and the financial resolution immediately after the financial resolution has been moved. Members who wish to speak in the debate should press their request-to-speak buttons now.
I am very pleased to open the debate on the introduction of the Scottish Government’s Cost of Living (Tenant Protection) (Scotland) Bill. In doing so, I express my thanks to everyone in the Government who has worked so hard, at an extraordinary pace, to make that possible.
Almost a month ago, the First Minister launched this year’s programme for government, which was published in the context of a severe cost crisis—one that poses a danger not only to livelihoods but to lives.
At that time, perhaps we thought that it could not get much worse, but, thanks to the frankly astonishing actions of the United Kingdom Government in the past two weeks, it has. We should make no mistake: this has the makings of a humanitarian emergency. This Parliament does not have all the levers that we really need to fully tackle the crisis, but we are determined to do what we can with the powers that we have to protect those who need it most.
Tenants, on average, have lower household incomes and higher levels of poverty and are more vulnerable to economic shocks. Some 63 per cent of social rented households and 40 per cent of private rented households do not have enough in savings to cover even a month of income at the poverty line. That compares with 24 per cent of households that are buying with a mortgage and 9 per cent of households that own outright. Not many households will escape the cost crisis altogether, but tenants are much more exposed. That is why the bill will provide tenants in the private and social rented sectors, as well as those in college and university halls of residence and purpose-built student accommodation, with greater protection.
The UK Government’s response to the energy crisis through the energy price guarantee falls far short of what is needed to protect people from severe financial hardship. We anticipate that, as a result, many more tenants will fall into fuel poverty and extreme fuel poverty this winter. Tenants do not just need help with their housing and energy costs; they need to feel secure at home over the winter.
With that context in mind, the Cost of Living (Tenant Protection) (Scotland) Bill has three key aims: first, to protect tenants by stabilising their housing costs by freezing rents; secondly, to reduce impacts on the health and wellbeing of tenants caused by being evicted or made homeless; and thirdly, to reduce unlawful evictions.
In addition to those important measures to protect tenants, the Government recognises that not all landlords are in the same financial position, so we have included in the bill necessary safeguards that will give them flexibility where it is genuinely needed. The intention is for the provisions to last until at least 31 March next year.
One of the impact assessments that have rightly been published is the child rights and wellbeing impact assessment, which mentions the particular impact of the cost of living crisis on our young people. Is the minister confident that the document also considers those people who are children—that is, under the age of 18—but who are tenants through their position at university or in higher education, given that they are still young people? The United Nations Convention on the Rights of the Child is not on the statute book yet, but the intention is to support the protections therein.
The impact assessment aims to capture those points, but I will perhaps take the opportunity, if I can, to address that in my closing speech.
I will now go through the provisions in some detail, starting with the rent freeze.
The bill will allow Scottish ministers to set a cap on the level of increase in rents, which will initially be set at zero per cent until 31 March 2023. Under the proposals, ministers will take powers to vary the cap, which will operate separately for the social and private rented sectors. Students in college and university halls and PBSA will also be protected through a zero per cent cap, ensuring that there will be no mid-tenancy rent increases. That will apply to all rent increase notices that are served on or after 6 September 2022.
As I said, we recognise that the cost crisis is also impacting on some landlords. Although the primary purpose of the legislation is about protecting tenants, it is also important to ensure that it reflects landlords’ circumstances. Private landlords will be able to make an application to increase rent for limited prescribed and legitimate costs associated with offering the property for rent where those costs have increased. The increase may be for up to 50 per cent of those costs and no more than 3 per cent of the existing rent. Those percentages may be varied if circumstances justify it.
Mr Harvie will be aware that the mere mention of the bill has seen a significant contraction in the size of the rental market, which is directly affecting students, especially at the University of Glasgow, where people have been reported as being instructed not to even enrol if they cannot find accommodation.
Does the minister agree that the real impact of the proposals will be to make it harder for students to rent flats, which will create another barrier to Scotland’s deprived young people from disadvantaged backgrounds attaining a university education?
I welcome Roz McCall to the chamber—I have not had the chance to say that on the record. However, I strongly disagree with her suggestion that the situation that is faced by students—particularly by the new intake of students in Glasgow and Edinburgh—is a response to the bill. There is no connection.
I mentioned the private rented sector. There are critical differences between the private and social rented sectors. For social landlords, there are already requirements about how rents are consulted on and agreed, and tenant participation and consultation in rent setting is a valuable part of our current system. Social landlords are not-for-profit bodies. Their rents are channelled back into the quality of homes, services for tenants and public investment in housing. That is why we are working in partnership with the social rented sector to consider the implications of any use of the rent measures after 31 March.
I told Parliament last week and emphasise again now that no decision has been made about any use of the measures after March. Any such decision will be informed by dialogue with the sector.
When it comes to what happens after 31 March, is the minister giving consideration to whether it might be possible to get rent control legislation and a temporary scheme in place more speedily, even if that was done through temporary emergency legislation? Could it be done in months rather than years?
We are working at pace to get this legislation in place within weeks, and we are working in close dialogue with the social rented sector. Already, good and creative ideas are coming forward about how we will work together with the sector.
The provisions on evictions prevent the enforcement of eviction action in the private and social rented sectors, and in college and university halls and PBSA, except in a number of specified circumstances.
I will make a little progress on eviction measures and will let members in in a moment or two.
Again, it is vital that the emergency legislation reflects a range of circumstances that tenants and landlords face, and ensures that responsible landlords continue to offer properties in the private rented sector.
In recognition of those factors, as was the case with the eviction measures in the coronavirus legislation, we have allowed for a number of exemptions from the moratorium. Those are a mixture of existing eviction grounds and new temporary grounds for eviction that we have developed. They include allowing evictions in cases of criminal or antisocial behaviour, to protect other tenants and neighbours from behaviour that can have a hugely damaging impact on communities; in cases in which a tenant has abandoned a property; in cases of repossession by lenders, to ensure continued lender confidence in the sector; and in cases in which a landlord intends to sell or live in the property specifically in order to alleviate financial hardship or to prevent their own homelessness. Those last two grounds are new. In effect, they are versions of existing grounds but have the important caveat that financial hardship must be demonstrated. We will work with the First-tier Tribunal for Scotland to support the implementation of that.
I invite Mr Balfour to come in.
I ask the minister to clarify the situation for me. If university students do not pay their rent but cannot be evicted, the normal process is that they are not allowed to sit their exams and go on to the following year. Does the legislation supersede that, or would universities still have the right to prevent people from sitting exams and going on to another year if they do not pay their rent?
I am aware that concerns have been expressed that some tenants—a minority, it should be suggested—might be tempted to stop paying rent even if they can afford it. I move on to the additional ground for eviction that we are exempting from the moratorium.
We have taken the view that, both in the social and the private rented sectors, eviction may still take place in cases in which there are substantial rent arrears. I will lay that out in a little more detail, because I know that some members have concerns about it. For the private rented sector, that means a total value of six or more months’ worth of rent arrears. For the social rented sector, it means rent arrears of £2,250 or more, which is around six months’ worth of average rent in the social rented sector.
The decision on that has not been an easy one, but, having considered it at length, I am firmly of the view that the provision will act as a safeguard for landlords and tenants. It will allay the concern that a minority of tenants might stop paying rent even when they can afford it. On-going substantial rent arrears can mean that a landlord can find it increasingly difficult to offer a property for rent, especially where no rent has been paid for a prolonged period.
In addition, for a tenant facing unsustainable rent arrears, prolonging the situation will only increase their debt and financial insecurity and it can trap them with debt that they will never be able to service. The protection that a tenant in such circumstances needs is different. They need direct support, and we are making support available through discretionary housing payments and the tenant grant fund, which was introduced in recent years and has since been made more flexible, to allow it to be used for more recently accrued arrears that are not related to Covid.
I am going to have to move on, I am afraid. I have taken a number of interventions.
As a result of changes that Parliament approved back in June, any eviction for rent arrears already has to take into account all the circumstances of both landlord and tenant that are judged to be reasonable by the tribunal or court, and it must be demonstrated that steps have been taken to help tenants to manage or reduce arrears.
The bill includes a provision to ensure that the restriction on the enforcement of an eviction order applies only for a maximum of six months from when the order was issued. That applies to individual cases and is separate from the consideration of whether the moratorium on evictions is extended beyond 31 March.
The restrictions will apply to all eviction orders granted in proceedings raised after the moratorium comes into force and will also apply to proceedings raised before the bill comes into force where the eviction notice was served after 6 September. It will not apply to eviction orders granted in proceedings raised before 6 September. Our aim here is to ensure that no one is evicted in a case started after, or in response to, the announcement of our intention to introduce an emergency rent freeze.
We know that many private landlords are professional and supported their tenants during the pandemic, but we cannot ignore the fact that a small minority will try to circumvent the new protections, including by trying to unfairly bring existing tenancies to an end. That is an affront both to tenants and to those landlords who follow the rules.
That is why the bill makes some vitally important changes to the way in which civil damages can be awarded for unlawful eviction, making it more attractive for tenants to challenge an unlawful eviction and receive appropriate damages where one has occurred. The provisions introduced in the bill replace the basis for the assessment of damages that the tribunal or court can award to a minimum of three times and a maximum of 36 times the monthly rent, though there will be discretion to award a lower amount if that is appropriate. In addition, the legislation will create reporting requirements where a landlord has been found to have unlawfully evicted a tenant. That will act as a strong disincentive to those unethical landlords who would seek to avoid going through the proper legal process.
The part of the bill that deals with rent adjudication looks ahead to a time when, we hope, we will be entering recovery from the cost crisis and are therefore intending to support transition out of the emergency measures. A big concern is that the lifting of the restrictions could lead to a large number of landlords seeking to increase their rent all at once. Returning to open market rent could result in significant and unmanageable rent increases for tenants and a volatile market. In those circumstances, the existing rent adjudication process would not provide an effective mechanism for determining a reasonable rent increase. The bill therefore contains a regulation-making power to temporarily reform the rent adjudication process to support transition out of the emergency measures and mitigate any unintended consequences from the ending of the cap.
I am afraid that I need to finish up in the next minute or two.
The power will be subject to affirmative procedure, ensuring that appropriate parliamentary scrutiny is given to the necessity for any temporary changes proposed.
Finally, on the general provisions, we are seeking to commence the bill the day after it receives royal assent. We propose the flexibility to extend the provisions in part 1 for two subsequent six-month periods, if the Parliament agrees, and that the powers in part 3 on rent adjudication will expire at the end of March 2024, with the option of extending them by periods of up to one year. There will be powers to suspend and revive the provisions in part 1 and powers to expire those provisions earlier than 31 March. Similar to the coronavirus legislation, there will be a requirement to review and report on the necessity and proportionality of the provisions in part 1, and ministers will be required to bring forward regulations to suspend or expire any provision that is no longer appropriate.
In conclusion, we are bringing forward the emergency legislation in recognition of the fact that people who rent their homes are—right now—being hit the hardest by an extraordinary cost crisis. The bill’s primary purpose is to provide the protection that is necessary for tenants while also recognising the circumstances of landlords. The bill significantly strengthens the protection against unwarranted rent rises and eviction, it sends a strong signal to landlords about the damages that can be awarded for unlawful eviction and it provides a bridge into the longer-term reforms that I set out in the new deal for tenants last December.
The safeguards in the bill provide a total package of fair and robust measures. This is a Government that is confronting the cost crisis head-on; a Government that is giving people stability in their homes and assurance about their rents—in sharp contrast with those who want to cut taxes for the wealthiest and let bankers’ bonuses soar.
The bill demonstrates our determination to use all the powers that we have to protect the people of Scotland from the harshest of times. Let us hope that all members of the Parliament will do what is necessary to support tenants.
That the Parliament agrees to the general principles of the Cost of Living (Tenant Protection) (Scotland) Bill.
From the outset of the debate and during the passage of the bill through the Parliament, I recognise that the Scottish Government’s intention is to look at how best we can support tenants during the cost of living crisis. After the unprecedented help for energy bills that is being provided by the UK Government, people across Scotland are, rightly, looking to both of Scotland’s Governments for support to assist individuals and families through a difficult period. However, the bill will do little to increase the incomes of most social housing and private tenants; instead, it will threaten the Scottish Government’s ambitions on affordable house building and climate change, as well as the ability of housing associations and private landlords to provide their tenants with the targeted support that is required during difficult times.
Members on the Conservative benches would have welcomed the opportunity to discuss workable policies with the Scottish Government; however, a 15-minute meeting with the minister after the bill was published and the use of the emergency legislation process to railroad the bill through Parliament have not presented that opportunity. Most people in the sector will find that that will have a negative impact going forward. Private and social landlords should have been brought around the table to discuss policies on, for example, rent stabilisation and the further use and development of the tenants charter. Instead, they have been left in the dark and now face an uncertain future, given the significant unintended consequences that the bill presents.
I am sure that the member will appreciate that, although many landlords would not have behaved in this way, if the information had come out that we were intending to introduce a rent freeze and we had consulted on the proposal, a great number would have gone for an immediate increase of as much as they could have got away with. Surely the member is aware of his constituents seeking 10, 20, 30 or 40 per cent rent increases. We should not have decided to introduce the rent freeze in a way that would have exacerbated that problem.
I am not sure that the minister understands his own bill, because it is backdated to September and the extensions that he has outlined mean that there is the potential for the provisions to last up to 18 months. The minister probably needs to rethink that.
The Scottish housing market is complex, especially in the capital. We all rely on the mixed housing market to provide the homes that Scotland needs now and in the future. The decision by SNP-Green ministers has been made without any consultation with the sector, and it will have consequences.
In Scotland, we have never had Government rent controls in the social housing sector. Rightly, housing associations are independent organisations that have been able to set rents each year, taking into account tenant feedback, affordability and the resources that are required to invest in maintaining properties and buildings, as well as building much-needed homes, which the Government has also failed to achieve.
The bill’s impact is, therefore, worrying, as the bill goes against the historical position and brings in the possibility of wider rent controls for the sector, the shattering of confidence to invest in new affordable homebuilding programmes and the real prospect of private landlords removing private rented properties from the market in the coming years.
For housing associations and private landlords, the bill presents a risk of hundreds of millions of pounds of lost income. It might require them to rewrite their future business plans and scrap investment in new affordable home builds, and it will undermine budget simulations for energy efficiency and decarbonisation for net zero—both key Government targets and the minister’s specific responsibility—which will be impacted.
The bill has already significantly impacted the potential delivery of new homes in Scotland; it will be much harder for housing associations to plan, if they are able to do so. Lenders might be nervous about lending, or they might lend at higher margins as confidence over future rental income decreases.
The bill introduces a risk that has not previously existed in Scotland—historically, we have had lower rents. It will undoubtedly trigger a slowing down of the building and construction of affordable homes and it could trigger a wider downturn in the construction industry at the worst possible time for our economy.
Does Miles Briggs think that the rise in interest rates, which is a direct effect of his Government’s mini-budget, which has set mortgage rates spiralling, might have an impact on landlords in the social and private rented sectors and on their investment and business plans?
Just a few months ago, Scottish National Party and Green ministers—including the minister and cabinet secretary who are sitting on the front bench—described Scottish Labour’s proposals around rent freeze schemes as “unworkable” and said that those schemes would
“heighten the risk of eviction” for tenants. The bill will introduce opportunities that could lead to that situation, so that is where ministers need to be clear. Let us consider Ireland, where a similar policy has resulted in a 30 per cent increase in homelessness.
We have already seen, and continue to see, a record number of people living in temporary accommodation in Edinburgh and across Scotland. The bill has the potential to supercharge the housing crisis, with fewer private tenancies being made available, fewer new affordable homes being built and the ripping up of the very tenants rights framework that we are told ministers want to see protect tenants. For example, the circumventing of local authority rent-setting processes will override not only the statutory responsibilities of elected members but the local processes that are currently in place to allow tenants to have a constructive opportunity to have their say in rent setting and negotiations.
There is growing concern in the housing sector around the unintended consequences of the bill, and I hope that the minister heard it during this morning’s committee meeting. We have already seen the impacts on students, as members have outlined, with both the University of Glasgow and the University of Stirling telling students not to matriculate unless they have secured accommodation. One of the key aspects of the bill is its unintended consequences.
How can Miles Briggs try to link the issues around student accommodation, which happened last year and the year previously, with the bill? No one knew anything about the bill at that time. The bill has absolutely nothing to do with those issues and it is ridiculous that Miles Briggs would link the two points.
The key point is that the bill will make the situation worse. The cabinet secretary and her Government have presided over 15 years of this housing crisis, and the bill will supercharge it. In the years to come, the situation can only get worse for students if fewer rented properties are available, which will clearly be the impact of the bill.
What we have already seen from this SNP-Green Government is that it is likely to use its majority in Parliament to push the legislation through without listening to genuine concerns or accepting amendments.
Scottish Conservatives will look to bring common sense and safeguards to the bill. We will ask that the concerns of key sectors, such as social and charitable housing associations, are reflected in the bill—that is vitally important. We also want to see additional resources for tribunals, which will now be tasked with extra work.
It is critical that there is incorporation of robust planning and monitoring of the potential negative impacts of the bill—the minister did not really outline that in any detail.
It is unclear for how long ministers intend to freeze rents or keep rent controls in place, beyond what the First Minister described in relation to 31 March. We need to see a time limit put in place. What mitigation measures will be provided for social and private landlords?
The process through which the bill has been introduced has been unacceptable, flawed and designed to bypass any independent scrutiny that the Parliament could bring to bear. The very organisations that the bill will impact have also not been part of the conversation. SNP, Green and Labour MSPs are about to use Scotland as a guinea pig. They are about to undermine the foundations of Scotland’s housing market.
International rent control schemes demonstrate the negative impact that rent controls can have and suggest the long-term negative consequences for our Scottish mixed housing market. We know how this will end: fewer private lets, a slump in building affordable homes, increased rents for future tenants and students unable to secure vital accommodation in order to study at university.
SNP, Green and Labour MSPs will be directly to blame for the significant damage done to our housing sector. The greater housing crisis that will come from this will be at their desks. I hope that they will make sure that the people of Scotland hold them accountable for their actions.
I draw members’ attention to my entry in the register of members’ interests, which shows that I am the owner of a rental property in the North Lanarkshire Council area.
Labour will be supporting the emergency legislation this week. We want to see the rent freeze and moratorium on evictions on the statute books without delay. In fact, we wanted to see that months ago. When we called for emergency legislation in the summer, we did so because we know that the Government has the powers to help people who are battling with living costs. Even if it has taken months to get to this point, we welcome the change of heart in the SNP-Green Government.
It goes without saying that thousands upon thousands of people will struggle to heat their homes or keep a roof over their heads this winter. People who previously were just managing will find themselves pushed to the brink with repeated financial shocks. We are in extraordinary times, made worse by the economic chaos unleashed by Tories after the bill was announced. That chaos will make winter longer and harder than any of us expected. The blame for the sky-high interest rates that are pushing up people’s bills is at the door of the Conservatives. Food bills, heating bills, fuel costs and rents keep going in one direction, and that is up.
I remind members that, like Mark Griffin, I own a rental property.
The member talks about heating over the winter. The fabric and structure of housing is going to be key to heating and people’s health and wellbeing, as the minister talked about earlier. One housing association wrote to me to say that a rent freeze will mean that housing associations will have to cut back on improvement and maintenance programmes. How does the member suggest that housing associations raise the money to keep those programmes going?
If the member has listened to my speeches in the Parliament over the past six months, he will have heard me repeatedly calling on the Government to insulate as many homes as possible before the winter. Housing associations have said that they are able to manage the current programmes up to 31 March and Scottish Labour will be lodging an amendment to ensure that additional funding is provided for social landlords if the freeze continues beyond that date, to provide tenants and housing associations with assurance that no capital investment programmes will be affected. I look forward to the member supporting that amendment.
I would like to make a bit of progress.
My colleague Mercedes Villalba made the case for an immediate rent freeze before the summer recess. Even then, that was the only solution that could offer tenants temporary respite from the crisis, which is currently escalating. At the time, it seemed as though the Government did not want to listen to the evidence. Had it backed the proposals back in June, the rent freeze could have been in place months ago. Indeed, had members of the Government backed Pauline McNeill’s bill in the previous session, we could have seen the provision of far more support for Scotland’s tenants.
In May, Citizens Advice Scotland reported that concerns around landlords increasing rent were now eight times higher than they were at the start of the pandemic. In June, the Office for National Statistics reported that private rental prices were growing at their fastest rate since 2012. During the passage of the Coronavirus (Recovery and Reform) (Scotland) Bill, Mercedes Villalba told members of the Covid-19 Recovery Committee what members of Living Rent were reporting. For example, a tenant whose landlord had increased their rent by £300 with no reason given was forced to leave. Another landlord decided that he could raise a tenant’s rent by £100 to £900, just by having a look at the average rents on the street. The landlord of another tenant, who had a pregnant wife and was living in a top-floor flat with nicotine-saturated carpets, increased their rent by £150 because he
“‘could not be expected to stand still while the market moves on’”.—[
Covid-19 Recovery Committee
, 9 June 2022; c 93.]
We are talking about people’s homes.
I advise members that I, too, have rental properties.
Under the Rent (Scotland) Act 1984, the Housing (Scotland) Act 1988 and the Private Housing (Tenancies) (Scotland) Act 2016, every tenant can appeal a rent rise. It would have been much simpler if the Government had given a determination that no fair rents would be set until the bill that is before us had been consulted on, which would have meant that it would not have required to be emergency legislation. Does Mark Griffin agree with me that such a determination would have been a better way of resolving the situation and of giving the Parliament time to discuss this really important issue?
Thank you, Presiding Officer.
That proposal holds merit but, rather than limiting the rent rise that tenants might experience at this extremely difficult time, I think that a rent rise of zero per cent would be far better for Scotland’s tenants than any rise at all and would support people through the winter. That is why Scottish Labour called for it months and months ago, but the Government was ready to turn a blind eye to such calls. Back then, we heard the usual excuses from ministers and members of the Government that amendments were not competent or would be subject to legal challenge, that the Government had not consulted on them or that they would, in fact, push up rents. The Government advanced those excuses months ago to dismiss Labour’s campaign for a rent freeze, but they now seem to be accepted although they are absolute nonsense.
To put this in the kindest possible tone, surely the member can see some slight differences between what was proposed as an amendment to the Coronavirus (Recovery and Reform) (Scotland) Bill, which was a blanket two-year rent freeze with very little legal justification, and the much more substantive, well-worked-up proposal that is before the chamber this week?
The justification for it was the severe hardship that tenants were and are facing, which is why the Government has acted, so it seems as though the moves that Labour made were justified.
However, my remark was an opening point in the debate and an invitation to the Government to get round the table and discuss how we might seriously implement such measures. Instead of just pooh-poohing the idea and then coming back months later to claim it as its own, it could have worked constructively and included my colleague Mercedes Villalba in the whole process, and then everyone would have been a lot better placed.
It has taken a month for tenants to have sight of the detail. We will continue to scrutinise the content of the bill to ensure that there is flexibility to deal with the crisis in the long term, while guarding against any potential unintended consequences. There remains a threat of more unmanageable arrears and homelessness after the moratorium ends. It is not a feature of the bill, but we urge the Government to renew the tenant grant funding urgently. I also welcome provisions to review and report on measures and for the Parliament then to come back and agree either to extend or to end those powers.
Likewise, new verification processes and protections against evictions are badly needed. Communication about the cap, the moratorium and the right to those protections is key. In May, RentBetter reported that there is a lack of confidence and, some would say, a fear about residents exercising their rights due to the potential repercussions of rent increases or losing their homes. Labour will draft an amendment to put a duty on the Government to write to all registered landlords and tenanted properties to provide advice and information about the provisions. I look forward to sharing that with the Government and discussing it.
However, it remains a fact that rents will continue to rise between tenancies at what look like increasingly higher rates and that rents will rise in tenancies until 5 December. There is a contrast in respect of what the First Minister said in her statement in the programme for government. I think that she said that the practical effect of her statement was that rents would be frozen immediately. There is a gap between that rhetoric and what will happen in practice. Rents will not be frozen until 5 December due to notices issued in advance of 6 September still having a three-month notice period. That is confirmed by the policy memorandum.
In closing, I want to highlight what the social sector, including the Scottish Federation of Housing Associations, the Convention of Scottish Local Authorities, local housing conveners and housing associations, has alerted the committee and parliamentarians to: the risk of a freeze next year to the affordable house-building delivery and maintenance programmes. Last week, I visited tenants and staff at Abronhill Housing Association’s new Aspen Place development. We need to see many tens of thousands more new and warm affordable homes. Those people told me about the financial implications of a rent freeze for next year. Upwards of £100,000 being lost from the business would mean cancelling all investment plans for 2023-24 and 2024-25. Those plans are worth nearly £400,000, including kitchens, bathrooms and heating upgrades.
Given that seven in 10 social tenants receive housing benefit or universal credit, the majority of social tenants will not benefit from a freeze but will lose out from a lack of investment in their homes. Where rent is paid by the United Kingdom Government, so are the increases. Modelling on a 3 per cent rent rise for next year would mean that £30 million would be lost to the housing sector and would go back to the UK Treasury.
The regulator puts the cost to the whole sector at £50 million, rising to £230 million by March 2027. It is clear that that would put at risk the 110,000 affordable homes and all the other measures that we would like to see as part of those investment programmes. Would ministers be able to fill that black hole if they were to continue the rent freeze into the following year?
The bill is not a panacea or a long-term solution. For that, housing policy in Scotland needs fundamental reform. We need to build far more houses. Although the bill is very welcome in the short term, it should not get in the way of that.
It is right for the Government to take emergency steps in an emergency, and this is certainly an emergency. The cost of living pressures are extraordinary, and they have been exacerbated by a reckless Conservative Government.
However, I want to make an appeal to the minister. We will support the bill at stage 1, but we are opposed to the inclusion of social rented properties in the rent freeze, and we are concerned about the inclusion of mid-market rental properties. Those homes are already subject to a form of rent control, so it would not be right to impose another set of controls with a freeze. That would undermine the fine judgments of housing associations, councils and charities in setting those rents. Those fine judgments mean that social rents are around half those in the private sector, and they fund proper maintenance and house-building programmes. They enable councils, housing associations and charities to modernise the homes, make them more energy efficient, meet their climate change obligations and build new properties for the thousands of people who are desperate for a home. Those fine judgments also allow for targeted funds to be available to help those who are struggling to pay their rent. Let us not undermine all those fine judgments, which have worked well for decades. Let us stick with what works.
Well over half of all properties in the social sector are occupied by tenants who pay their rent through universal credit. In Cairn Housing Association, the figure is 60 per cent, and in Kingdom Housing Association, it is 70 per cent. Those people will not benefit from a rent freeze. There will not be any more money in their pockets; the Treasury keeps the money, depriving the Scottish economy of important revenue and undermining house-building programmes.
With targeted support and universal credit rental payments, is the rent freeze for the social and mid-market sector worth it when it could undermine house-building, maintenance and climate change programmes?
During the debate, the member will have heard me make it clear two or three times now that we have not yet made decisions about what will happen after 31 March. In the period before then, there is no direct impact on rental income for social housing. Does he accept that we are working in good faith and are already having constructive dialogue with the social housing sector to understand all the important issues that he raises?
I accept what the minister says, but there is a point of principle here about how rents are set. For generations, rents in the social sector have been set through partnership working between tenants and their landlords. That has worked well and has delivered rents that are half what they are in the private sector. Given all the other negative impacts and the universal credit and special, targeted payments, I do not understand why we seek to undermine that process, even though cost of living pressures are involved.
Patrick Harvie’s point that the rent freeze will not impact the sector until after March—he has not made any decisions about that either—leads to uncertainty in the sector about how it will project forward its house-building programmes for the next 20 or 30 years. Even if the freeze is for only six months, it will interrupt that flow of decision making. It will apply for six months, but it may last for much longer; the minister has not ruled that out. I accept that he is talking to the sector, but we do not know absolutely that there will not be controls after March next year. How can housing bodies plan for the future when it is unclear what Government policy will be?
There must be a more stable policy environment if housing decision makers are to reach the best possible conclusions. The uncertainty also limits the ability of councils, charities and housing associations to have meaningful discussions about rent levels after 31 March and utilise their well-tried tenant consultation processes.
I know that the minister has indicated that consultation, debate and discussion can be had, but how can we have a discussion when we do not know whether we will be under a rent freeze after 31 March? The minister indicates that discussions can be had, but they will be very limited.
Let us look at what the housing associations have told us. Cairn Housing Association states that it is
“already making decisions to significantly reduce our planned investment programme of improvements to tenants’ homes. This will mean fewer new kitchens, fewer new bathrooms and reduced programmes of windows and roofing works. We are also now having to consider postponing or cancelling major planned modernisation projects such as major renovation of sheltered retirement schemes.”
Cairn is a registered social landlord and a not-for-profit charity. It grew out of the Royal British Legion’s housing arm in 1989. They are good people with a social conscience, so why are we trying to fix them? Cairn goes on to state:
“We are in the middle of delivering a 500 new home programme. As a direct result of the rent freeze announcement, we are actively considering postponing or cancelling a number of newbuild schemes to protect our cash position.”
It cannot be right that Cairn is considering cancelling its new-build programme.
I sense a real anxiety in the social sector, despite the positive discussions that the minister has had. Kingdom Housing Association, which is in my area, states:
“The impact of a rent freeze, or rent cap, will remove our ability to financially manage our business plans and will have an impact through unintended consequences related to: a reduction in our provision of new homes, the deferral of planned maintenance works, restrictions on our ability to provide enhanced net zero and innovation investment and most importantly result in a potential reduction in service delivery standards to tenants and removal of the enhanced added value services we provide.”
It cannot be right that good housing associations such as Kingdom Housing Association are even considering such measures.
I hope, therefore, that, in tomorrow’s stage 2 proceedings, the minister will be open to the amendments that I will lodge. Those will provide a number of different opportunities for him to recognise that the social, charity and local authority sectors are different. Those regimes already have in place a form of rent control, their systems are tried and tested and they have rents that are half those in the private sector. I simply do not understand why they are being lumped in with this process.
I hope that the minister will be open to considering my amendments, and that we end up with a bill that works and that supports the people who are desperate for help at this time. In that way, we can ensure that we deal with the cost of living crisis, rather than undermine the good work that housing associations, councils and charities have done for a long time.
T oday, we see clear evidence that our Parliament can act quickly during a time when the cost of living is spiralling to bring about protections for those who rent their homes. Inaction in another place should not be replicated here, and good ideas across political lines can and should be embraced where possible, as we should collectively aim to make lives of those who live in Scotland better.
I spent years working in and around the housing and homelessness sectors. Among the jargon, the spreadsheets, the housing revenue accounts and the bureaucracy, the people—the tenants—can often be forgotten. The pandemic and now the cost crisis have brought people back into sharp focus.
During the height of the pandemic, I was still a councillor and COSLA’s housing spokesperson. We saw a surge in action to get people into accommodation, to prevent evictions and to mobilise the entire sector to work collectively to ensure that people and communities were safe from the clear and present danger. We need to see the cost of living crisis in the same light as the pandemic: it is a clear and present danger to wellbeing.
I am confident that the member will deal with that very well.
What advice would the member give to a landlord whose mortgage costs will increase over the next six months? How will he pay for his mortgage? Will we simply end up with people being evicted because their landlord cannot afford to pay their mortgage?
I thank Jeremy Balfour for that intervention, as it allows me to turn the focus back on to why we have spiralling inflation, with mortgage costs hitting a point at which it might not be sustainable for some landlords to continue. There is provision in the bill for landlords who face being unable to afford such increases. We can see from those protections that the Government has listened to the private landlord sector.
People are experiencing a contraction in their income the likes of which most have never experienced before. Many of us came through the financial crash of 2008, but at that point our food and energy bills did not skyrocket to the alarming extent that we see now, and our incomes had yet to suffer a decade of austerity at that point.
We know that those who rent their property spend a disproportionately large part of their income on rent and have lower incomes overall. Those who are in the private rented sector spend a significantly higher percentage of their income on rent. The cost can be much higher if the local housing allowance does not cover all their housing costs due to local pressures, meaning that they will be required to use some of their universal credit towards rent. If we add that to the disproportionately large increase to the living costs of those with limited incomes, we can see an impending crisis over the winter months.
I respect the member’s experience in the housing sector. Throughout the process, we have seen evidence from places where rent freezes have been tried that suggests that the policy can create housing shortages. Does the member have any evidence to suggest that the experience would be any different in Scotland?
Thank you very much, Presiding Officer.
We can always cherry pick the evidence. We must look more widely than at our immediate neighbours. A lot of places on the continent of Europe have quite stringent rent controls and a really buoyant private rented sector. We cannot just choose the evidence that suits our narrative. I urge the member to look into that in his own time.
Social justice and anti-poverty campaigner Jack Monroe, the bootstrap cook, drew attention to author Terry Pratchett’s concept of the boots theory of socioeconomic unfairness according to Discworld character Sam Vimes. Pratchett wrote:
“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money ... Take boots, for example ... A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars.”
“who could afford fifty dollars had a pair of boots that’d still be keeping” their
“feet dry in ten years’ time, while a poor” person
“who could only afford cheap boots would have spent a hundred dollars on boots in the same time?and would still have wet feet.”
With rent increases in the private rented sector of up to 40 per cent in the recent past, the feet of Scottish tenants are wringing. That evaluation of socioeconomic unfairness is hugely pertinent today as we see our most vulnerable bear the brunt of austerity and, frankly, economically illiterate fiscal events in another place. That is why it is right that we have a bill before us today that seeks to place a cap on rent increases at zero per cent and that re-introduces a moratorium on evictions until the end of March 2023.
Folk with the least are paying the most, as a percentage of their income, for essentials. Women, people with disabilities and people from black and minority ethnic communities are facing the starkest of choices, and it is incumbent on us in this place to ensure that they do not face rent increases that could lead to homelessness during a cost of living crisis—that would be a humanitarian crisis in every community.
Although the Scottish Government does not have control over energy policy or inflation, it has, with a largely limited budget, sought to mitigate the worst effects of the situation to the tune of £3 billion every year.
The combination of the emergency measures with increases to the tenant grant fund and discretionary housing payments, and flexibilities to allow cost of living and fuel poverty issues to be considered, means that there is support for people who cannot afford to cover all their housing costs at this time. It is vital that those funds, as well as the Scottish welfare fund, are publicised and maximised at every opportunity. I welcome Mark Griffin’s suggestion that we write to all registered social landlords to ensure that they do that.
With regard to the proportionate measures that have been set out to protect landlords facing financial difficulties, I ask that we work to ensure that, when a landlord needs to sell their property, they are supported to do so with a sitting tenant and that, if appropriate, local authorities or registered social landlords consider buying back as many of those properties as they are able to. That would also protect tenants by allowing them to continue to live in their home without disruption.
Housing is about much more than bricks and mortar. It is about feeling safe and secure. It is about wellbeing and warmth. I look forward to the substantive housing bill to come, but, in this immediate emergency situation, I urge members to support this bill.
Whatever the intentions of the bill, it is very hard to escape the conclusion that this is SNP-Green grandstanding. The SNP-Green coalition Government is treating the Parliament with contempt for the sake of a headline. The bill will create homelessness, it is reckless, and it is certainly not an example of evidence-led policy. Any truncation of the legislative process is bound to mean that scrutiny will not be what it should be, especially given the consequences that will flow from the enactment of this flawed bill.
Mark the warnings of the expert voices in the sector, which could not be clearer. I cannot help but believe that, deep down, the more thoughtful SNP and Labour members know that the grave concerns that have been raised by the sector are well grounded, as demonstrated by the evidence that Willie Rennie cited from the Cairn Housing Association.
The member mentions experts in the sector. Does he accept that tenants are experts in how the rented sector works and that tenant organisations have been crying out for the legislation?
Of course I accept that tenants are a very important part of the rental housing market, but we should listen to what is being said about the consequences that will flow from this flawed bill.
I am not sure what Michelle Thomson’s point has to do with the bill. I cannot possibly account for the logic that drives that kind of political point scoring for the sake of it.
I put it to members that the SNP is treating with contempt not only the Parliament but tenants and students across Scotland by pushing through a policy that international case study after international case study shows does not work. It does not work, because it reduces the supply of rented accommodation and increases the likelihood of homelessness. It does not work, because it reduces the maintenance of properties and increases the number of tenants and students living in lower-quality accommodation. It does not work, because it reduces the incentive for landlords to invest in their properties to improve energy efficiency, and so increases the energy bills of tenants and students and the difficulty of reaching our net zero targets. All of that is at a time when the rental market is already shrinking.
I am talking about the evidence on the general market situation. If there are specific examples of that kind of ruthless landlord, I am sure that something can be done about it, but the bill is taking a sledgehammer to crack that particular nut.
At the same time, the funding for Scotland’s universities from the SNP-Green Scottish Government is being cut in real terms, and Scotland’s universities are in effect being bailed out by fee-paying international students. Housing is already being squeezed, as has been mentioned. Students at the University of Glasgow have been encouraged to withdraw from their courses or to defer their studies for a year. Other students have been forced to take up accommodation 30 miles away from their place of study.
My friend Miles Briggs mentioned the Irish case study. The Irish Economic and Social Research Institute and the Irish Department of Housing, Local Government and Heritage have stated categorically that, whatever the benefits that are promised from the policies,
“these measures come with supply-side health warnings: they have been shown to lower investment and maintenance in buildings and lower overall rental supply”.
Our friends in the Republic of Ireland do not need to look at international examples to determine how disastrous rent control policies are, because they are living with them. The Irish introduced such controls in 2016, and they have seen the number of homes available to rent plummet. In August this year, only 716 homes were available to rent, in a country with a population of 5.1 million people. A by-product of that is a shocking increase in homelessness. According to Department of Housing, Local Government and Heritage figures, in July this year, 10,668 adults and children were homeless across the Republic of Ireland. That is a record high and a 30 per cent increase on the figure in May 2021.
It is not just Ireland where there is an issue. The abhorrent consequences of rent control can be seen clearly in any city or country that has introduced them. In Stockholm, the average wait time for rent-controlled apartments is now more than nine years. In New York, the introduction of rent controls led to more than 125,000 people being homeless and, in California, it led to more than 100,000 people being homeless.
I see the minister shaking his head, but Universities Scotland, in its response to the bill, warns about unpalatable “unintended consequences”. First, Universities Scotland makes the point that it has already acted to protect students for the next academic year, because rent, which includes bills such as electricity, is fixed for the next academic year and so will not increase, regardless of inflation or changes to gas and electricity prices.
Secondly, Universities Scotland says that, if the rent freeze lasts for more than six months, that could mean that the cost of running student accommodation will become “financially unviable”, putting jobs at risk and further reducing supply.
Thirdly—I ask the minister to make the Government’s position on this point very clear—Universities Scotland states that banning eviction would put students at risk if universities were unable to evict an individual whom they believe poses a risk of sexual or physical violence to other students.
The member will be well aware that, as with the temporary restrictions under the coronavirus legislation, not just criminal but antisocial behaviour is very clearly exempted from the moratorium on eviction.
If an individual is believed to pose a risk of sexual or physical violence, they can be evicted—is that what the minister is saying? Can you shake your head minister? [
.] That is not what I am asking, so I think that we need some clarification from the minister on that.
That is what Universities Scotland is asking for. I am sorry to try your patience, Presiding Officer, but if the universities cannot ask students to depart accommodation on terms agreed, that will put vitally important revenue-generating summer events at risk. It will also put at risk accommodation for the following year’s first year student intake. That is a very important consideration.
Finally, Universities Scotland believes that the focus should be on long-term strategy, not this emergency bill that has had such little scrutiny. The minister should deal with each of the concerns expressed by Universities Scotland in responding to the debate. With that, I will conclude.
I refer members to my entry in the register of members’ interests. I own a rental property in East Lothian.
This week is challenge poverty week and that is exactly why we are here with this bill. They say that a week is a long time in politics. It is an old saying but still so true—just ask Kwasi Kwarteng. The cost of living crisis has been building for a long time and it is hitting the poorest in our community. Again, that is why we are here today.
Of course, the Russian invasion of Ukraine exacerbated the issue in terms of inflationary pressures, but those pressures were there before that. The energy price cap has been set at an average of £2,500. I remind members that it was £1,100 in 2019. However, the £2,500 is an average, not a limit—perhaps someone should tell Liz Truss that, too.
Recent studies show that 25 per cent of people in Scotland, and up to 35 per cent of single parent families, will not be putting the heating on this year. For context, that is 25,000 residents in East Lothian. In Scotland, 72 per cent of residents are projected to be in fuel poverty, which is more than 70,000 residents in East Lothian.
Rental costs are usually the biggest costs for everyone. Inflation is projected by some commentators to rise to 22 per cent—believe you me, that is the fault of the UK Government—and food price inflation is forecast to be around 13 per cent.
The member makes a point about inflation and then tries to blame the UK Government exclusively. Is the UK Government also responsible for the inflation rate of 10 per cent in Germany, 10.1 per cent in the European Union, 10.5 per cent in Austria, 11.27 per cent in Belgium, 11.4 per cent in Greece, 12 per cent in the Netherlands, 15.3 per cent in Romania, 15.6 per cent in Hungary and 17.7 per cent in Poland? Is the UK Government also responsible for those rates of inflation?
Yes, it is, and that is the fault of the UK Government.
The Scottish Government mitigates Tory UK Government policy choices by more than £700 million per year. That is the cost of this broken United Kingdom, which prioritises the most well-off in our society over the most vulnerable in our society and prioritises borrowing to cut taxes for millionaires over measures for people who do not earn enough to pay tax.
On a point of order, Presiding Officer. Does Mr McLennan have an obligation to make points of truth and fact in this debate, or is he completely unrestrained when it comes to that obligation?
My last line was:
that is the context; that is the problem facing many rent payers in Scotland. The context is important.
What can the Scottish Government do to help, on top of the £700 million that it provides in mitigation every year within a fixed budget that is not inflation proof, when it does not have the borrowing abilities to support those who are most affected? The context that the UK Government has set is why the bill to freeze rents and safeguard against evictions has been introduced. I am proud to be part of a Government that supports our residents in that way.
This emergency legislation simply seeks to increase protection for tenants from rent rises and eviction action during the cost of living crisis that has been created by the Tory Government. If approved, the bill will give ministers temporary power to cap rents for private and social tenancies, with the cap set at zero per cent from 6 September 2022 until 31 March 2023. The bill includes the further power to maintain or vary the rent cap over two further six-month periods. The Local Government, Housing and Planning Committee will regularly review the proposed legislation over the next six months. We discussed that with the minister at this morning’s meeting when he advised us of that power.
The enforcement of eviction actions resulting from the cost crisis will be prevented over the same period except in a number of specified circumstances, which the minister has talked about. Damages for unlawful evictions will be increased to a maximum of 36 months’ worth of rent.
Crucially, the measures will apply to students in college or university halls of residence or other types of purpose-built accommodation. In the summer, we—other members were there at the time—heard from the National Union of Students about rent rises of more than 30 per cent over a number of years. It is clear that that is a deterrent when people are choosing whether to study.
The Scottish Government has recognised that the rental sector is a source of income for many people in Scotland. That is why the bill includes safeguards for private sector landlords, allowing them to apply to increase rent to partially cover, subject to an overall limit, a limited number of specified costs, including increased mortgage interest payments on the property that they are letting, an increase in landlord insurance or increases in service charges that are paid as part of a tenancy.
Four priority areas were raised in the joint briefing from Citizens Advice Scotland, the Joseph Rowntree Foundation, Poverty Alliance and Shelter Scotland. The priorities are to protect all tenants from rent increases and eviction, except in cases of antisocial or criminal behaviour; to recognise and address unintended consequences for both tenants and landlords; to incorporate a robust plan for monitoring impact; and for the bill to be accompanied by an immediate plan to raise tenant and landlord awareness of the changes and of the financial help that is on offer to households that are struggling. The minister touched on those in his introductory speech, but I ask that the cabinet secretary speak to them in her summing up.
I am proud to support the bill at stage 1. It will look after the most vulnerable people in our society.
Until yesterday afternoon, the Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights had been very coy about this emergency legislation. I have written to him, and I know that Mercedes Villalba, who is unable to be here today, sadly, and who has courageously led the Parliament in the campaign for a meaningful rent freeze, has written to him seeking clarity, but he has refused to give it.
What we do know is that the Scottish Association of Landlords met the Scottish Government just last week and, after the meeting, told its members that
“it is expected that landlords will still be permitted to serve tenants with notice to end the tenancy as normal. If the tenant doesn’t vacate during the notice period landlords can then apply to the tribunal for an eviction order as normal”.
“If the eviction ban was to be extended beyond 31 March 2023 then each individual eviction order would be subject to a maximum delay of 6 months e.g. an eviction order issued in December 2022 could be enforced in June 2023 at the latest (or on 1 April 2023 if the ban isn’t extended).”
The bill confirms that to be true. It is an eviction ban, but the best that can be said of it is that it is a temporary, deficient, demi-semi-eviction ban. It is a ban in which tenants can still be served with a notice of eviction, that does not make it any harder for landlords to evict tenants, that does not strengthen tenants’ rights, and that simply pauses the eviction for a time-limited period.
Let me turn to the rent freeze and what the Scottish Association of Landlords said about that. It said:
“Rent increase notices issued before 6 September are expected to be enforceable as normal. It is possible that safeguards may be put in place to allow rent increases in exceptional cases where a landlord can demonstrate that without one they will suffer”— in the association’s words—
“extreme financial hardship.”
It went on:
“The rent freeze will only apply to mid tenancy rent increases and will not affect a landlord’s ability to apply a rent increase between tenancies.”
The bill confirms that that is true.
This is not only a long way from a universal freeze on rents; there is a real danger that the Government’s promise of a rent freeze—this “most significant announcement,” in the words of the First Minister—will melt under the heat of fact.
I have laid out exactly why this needs to be a balanced package, and I have been saying since the member’s colleague moved an amendment back in June that a universal blanket approach would almost certainly fail the test of proportionality. I am a little confused as to why the member is using his speech simply to read out what I have already said is the Government position and is doing so in an ever-angrier tone of voice.
I will speak in whichever tone I choose, and I will include the content that I wish to include in my speech. I will not be dictated to by Mr Harvie, whether he is on the front bench or not.
I am bound to ask the Scottish Association of Landlords, if it is concerned that the proposals will cause extreme financial hardship for its members: what about the extreme financial hardship that its members are imposing on tenants? If landlords are complaining that their altruism is being tested and that a temporary rent freeze will drive them out of business, so that the supply of homes for rent in Scotland will dry up, I ask them why, if this really is about altruism, they do not sell their private rental properties to the public sector so that they can become social rented homes and the tenants can stay.
What we truly need is a rebalancing of power between landlord and tenant. At the moment, if a tenant considers their rent to be unfair, the onus is on them, first, to know that there is such a thing as a rent officer; secondly, to know where to find a rent officer; thirdly, to contact that rent officer and get them to undertake an assessment; and, fourthly, to negotiate the implementation of that fair rent with the landlord themselves. I ask the minister for tenants’ rights why the burden of proof should not be placed on the landlord to justify any rent rise, rather than on the tenant to win a case against it.
A constituent of mine, Ashley, contacted me a day or so after the First Minister’s announcement to say that her letting agency had sent her a contract that puts her rent up from £475 to £530 a month. Her rent does not include bills such as those for gas and electricity, and the mortgage on the property has been paid off. In other words, there is no justification whatsoever for that huge rise. I have her letter here. She told me:
“It’s hard for everyone right now. My gas is up, my electric’s up ... what a time to pick to up my rent as well.”
Ashley has not signed the contract, but she does not know whether the rent freeze will apply to her or whether, at the end of this month, she will have to start stumping up for that 11.5 per cent hike. Ashley said to me:
“I personally don’t think it’s fair that only some rents will be frozen.”
She is right, and she speaks for thousands of young people like her.
A temporary freeze will not help. If it is designed to take the heat out of the effective grassroots campaign that has got us to where we are today, it will not work. We need proper rent controls. That is what this Parliament must legislate for. Instead of short-term emergency legislation, we need long-term transformational change to tackle the housing crisis, unaffordability, overcrowding and homelessness and to take on the rogue landlords and properly protect tenants.
Without tackling insecurity and the soaring cost of housing, we cannot begin to tackle inequality, and, without tackling inequality and injustice in housing, we will never tackle them in wider society. We must be on the side of the tenant, not the landlord, and today we must deliver with action and not just with words.
I will try not to use my angry voice today; I will try to use my reasonable one.
I welcome the opportunity to speak in the debate. Although the Scottish Government does not have the power to prevent people’s energy bills from soaring, it is right that it is taking action to ensure that their rents do not rise and that they are not evicted from their homes over the winter. I therefore welcome the emergency legislation, which will ensure that that is done in a way that is legally robust, with the right safeguards being in place.
The bill aims to restrict landlords from increasing rents—with exceptions, as we have heard—until March 2023. It also bans evictions in the same period. The bill confirms that rents will be frozen unless landlords are experiencing increased property costs such as increased mortgage interest or service charges.
It is important to point out that landlords will be able to evict tenants, but only if the landlord can prove that they are suffering from financial hardship. That is not necessarily obvious from the commentary in the media or, indeed, from some landlords.
Under the proposals in the bill, it will still be possible for rents to be increased between tenancies, with the policy memorandum that is attached to the bill stating:
“the rent freeze ... protects tenants, helping them to stay in their homes during the cost crisis, whilst responding to the need to ensure that the measures are proportionate.”
The cap on rent increases will initially be set at zero per cent, meaning that no rises will be permissible in the short term. The Government has made it clear that that will apply until March 2023, when the policy will be reviewed.
My Aberdeen Donside constituency has many people living in social rented accommodation as well as many people living in private lets. Many of my constituents will be among the hardest hit by the Tory-made cost crisis. Tenants, especially those in the private rented sector, spend a greater proportion of their income on housing than is spent by people who own their homes. People who rent have, on average, lower incomes and housing with lower energy standards. Recent research by the Joseph Rowntree Foundation found that almost a third of people who rent their homes in Scotland were already finding it difficult to pay their rent before the current cost crisis hit.
We face the threat of a humanitarian emergency in every community across Scotland, and it is a responsible move by the Scottish Government, in the absence of the powers to act properly on energy bills, to act through the emergency legislation, which will protect the most vulnerable in our society.
It is also worth noting the comments of organisations that have welcomed the bill. The Poverty Alliance said:
“Rent freezes will help tenants across the country.”
Shelter Scotland has stated that the short-term, emergency measures in the programme for government are
“great news for tenants” and that they
“will stop people ... losing their homes.”
Shelter Scotland also told Parliament that any measures to ensure that citizens have access to the right to a home are very welcome in the context of the cost of living, although it will wait to see the final detail.
Living Rent said that a rent freeze would have a
“massive impact” as
“skyrocketing rents continue to pile on top of out of control energy bills”.
I did receive the briefing papers—as, I am sure, Mr Kerr did. I have read them over just as much as he has, and I know that the Government has read them as well.
The Scottish Trades Union Congress stated:
“The Scottish Government is to be commended for freezing rents. If implemented correctly—and we are pressing for further answers—this will help thousands of households across Scotland when they need it most. When used, the powers of our Parliament can bring positive change.”
Those expert testimonies from organisations on the front line of the cost crisis speak for themselves and they show the absolute need for the bill.
It remains essential that tenants continue to pay their rent, and anyone who is struggling to do so should contact their landlord at the earliest possible opportunity. The bill aims to freeze rents at an affordable level so that folk can continue paying their bills and do not fall into arrears. Tenants and landlords who are willing to work together to address rent arrears can receive support from the Scottish Government and local authorities, such as through the tenant grant fund and discretionary housing payments.
I also welcome the Scottish Government’s commitment to continue to engage with landlords as well as housing authorities while the legislation is in place up to March.
I will be, Presiding Officer.
Yesterday, I met a chief executive of a local housing association in South Scotland who has concerns about the impact of the rent cap on future development, maintenance and support. I understand that the housing authorities’ plans are already set until 1 April. Does Jackie Dunbar agree that the Cabinet Secretary for Social Justice, Housing and Local Government should commit to engaging with the housing authorities continuously in the process as we go ahead?
I absolutely agree with my colleague Emma Harper. As a former vice-convener and a former spokesperson for housing for the SNP group on Aberdeen City Council, I know that most social sector rents are already set until 1 April 2023, so having the temporary measure in place until March should not financially impact on housing authorities or social landlords. I join Emma Harper in asking the cabinet secretary to reaffirm her commitment to keeping housing authorities fully informed of the Government’s plans as we approach March.
During the current UK Government-made cost crisis, I welcome the emergency legislation from the Scottish Government, which will work to protect my Aberdeen Donside constituents as well as folk across Scotland during the winter months.
The world is in the grip of an economic crisis the likes of which we have not seen in years. As a result of global factors, the people of this country are facing an incredibly difficult winter, and it is incumbent on all Governments to provide for them.
However, when Governments are considering what measures to implement, due consideration must be given to the potential consequences outwith the primary intent of legislation. It is very rare that any action or piece of legislation has no consequence outwith the area that it is directed towards. In that vein, I have real reservations about the proposed rent control measures that the Government has put forward. Unintended consequences will lead to policy promises that could be devastating, particularly for the people I represent in Lothian.
The Scottish Government is far from being the first to have such an idea. There is example after example of rent control schemes that have been implemented, only to be rolled back after disastrous unintended effects manifested themselves.
As others have mentioned, we should look at what happened in Germany. The rent control scheme there was hailed as a policy that would fix every problem that the market could not fix. The same was said of the rent pressure zones that were introduced in Dublin. Both schemes were supposed to ensure affordable rent for all. Instead, they manufactured an extreme shortage of available rental properties and drove many landlords from the market. The number of classified adverts for rental properties fell by half as a result of the measures that were taken in Berlin, and, according to the economist Jim Power, the Irish system of rent pressure zones is causing
“an exit of private landlords from the market and is reducing the supply of rental property and putting upward pressure on rents at a time when significant increases are required to satisfy demand and create a functioning residential property market”.
The definition of insanity is doing the same thing over and over while expecting different results.
The bill that we are debating in this Parliament will give the Scottish Government the power to extend the provisions for 18 months. That is not temporary as far as I am concerned.
I need to make progress, if that is okay.
It is not controversial to point out that rent controls limit the stock in the rental market. That has been observed time after time, and it is a mystery why the Scottish Government is expecting something different.
If price fixing was not enough, the proposals on evictions from property will add even further uncertainty to the market. Removing the incentive for tenants to pay and
the ability of landlords to regain their property throws up a litany of issues that the Government has not thought through. For one, there are costs associated with letting property that are met by rental income. If landlords cannot rely on a steady stream of rent, many will be unable to fulfil their financial obligations in relation to repairs, for example, and we will see properties falling into even worse states of repair.
In addition, some landlords in Edinburgh and the Lothians rely on regular rent to pay their mortgage. Especially for those with a buy-to-let mortgage, a halt to income can cause their property to be repossessed, which will likely result in the tenant being evicted as well. If the Government had thought through the situation, it would have appreciated that it needed to bring something different to the table.
The other group that will be deeply affected by the bill is housing associations. Banks lend associations money, with rental income acting as a guarantee against the debt. If an association’s income becomes unsustainable, it is likely that the bank will refuse to lend it money. That will bring another pressure to the sector and we will see the rental property market collapse.
It is not just me who is saying that. We even had representations today from the Convention of Scottish Local Authorities, which is not necessarily in favour of everything that Conservative members do. It says that what is proposed is a power grab by the Scottish Government and that it takes away from localism at every level. It asks why local authorities should not set
rents, rather than central Government. Setting rent caps and freezes
at a national level strips local government of its power. Its ability to set rent for local houses—
I am in my final 30 seconds, unfortunately.
With no consultation with the sector, we are going to end up with more people being homeless over the next few months. The policy that we are debating is a fundamentally wrong policy. It will end up with people being in a worse place, and we will see more people selling their properties to be able to meet their own rising costs.
I refer members to my entry in the register of members’ interests, which states that I rent some property out. I consider it unethical to speak on issues on which it could be construed that I am attempting to influence the Scottish Government in my own interest. Therefore, my speech will make no reference to the buy-to-let market. I will, however, make some remarks on the broader housing market.
Fundamentally, the Scottish Government is seeking to do the right thing, but it is subjected to limitations. The first of those is a lack of adequate powers. The Government’s job, above all else, is to protect Scottish citizens, and there is nothing more fundamental than having a roof over one’s head. However, without an appropriate basket of powers, including on borrowing, the Scottish Government is heavily constrained.
The second is the macroeconomic context. The Scottish Parliament has no monetary policy powers and very limited fiscal powers. That is why the Scottish people are facing the full brunt of Tory economic incompetence. Rising food inflation, rising mortgage costs and the recent disastrous fiscal event by the latest Tory chancellor and Prime Minister all call for action. The willingness of the Scottish Government to take action is to be commended.
I will carry on just now, because I am changing scene.
I sound a note of caution and quote
Susan Aktemel of Homes For Good, who said on LinkedIn:
“The Scottish Government seems to be legislating against new housing supply in the midst of a housing crisis”.
Those remarks go to the heart of the difficult balancing act that the Scottish Government must undertake: how does it take action to protect tenants without cooling the underlying supply of housing?
I will open some areas for discussion. The mood music for institutional professionals in the housing market must be right. They must know that Scotland is open for business and that their long-term investment plans can proceed. Pension schemes, in particular, have a long-term focus on patient capital, which must be considered. I highlight the build-to-rent model, which offers a route for Scotland to reach the scale of the housing that is required against a backdrop of undersupply and overdemand.
Earlier, I made the point that there is evidence that moves such as rent freezes can reduce the housing stock that the member rightly calls for, which we need more of. What evidence does she have that that will not be the unintended consequence of the bill?
I do not have any evidence, because I do not have a crystal ball. However, I am pointing out that there is a housing market—we are not debating that here—and what is critical in relation to the housing market is having macroeconomic and fiscal powers. If we had adequate borrowing powers, we could take action, for example, to build more houses. That is the point that I am making. [
.] I will carry on.
I reference the Scottish Property Federation’s remarks that there is a pipeline of new build-to-rent properties that is worth £3.5 billion and its concern that some of those projects might be put on hold. Risk assessments for other businesses such as small and medium-sized enterprises are growing more complex, and they are becoming more risk averse. Access to funding is already problematic, with interest rates increasing and being exacerbated by the current Tory-induced chaos. No one who lived through the credit crisis of 2008 will forget clauses in commercial contracts that allow for a demand for the repayment of bank loans regardless of whether any debt is being serviced regularly. We need strong guarantees that, this time around, the finance sector will act appropriately to support businesses.
The member is making some very good points, but she has not answered the intervention from my friend Liam Kerr. Does she acknowledge that international study after international study shows that the imposition of rent freezes creates constrictions in the supply of available property for the homeless?
I acknowledge that restriction of supply can have an impact—that is true. I am making it clear that the issue is very complex. If Stephen Kerr and Liam Kerr really cared about the housing market, they would be calling for increased borrowing powers for the Scottish Government so that it can build more houses, and for more macroeconomic powers for the Scottish Parliament, so that we can take further action. That is the point that I am making. Conservative members want us to sit passively and leave those matters to the Tory Government in London, and we have seen where that has ended up.
It is worth noting that all those economic factors, and many more that I have not mentioned, are outwith the control of the Scottish Parliament and the Scottish Government, which adds emphasis to my opening remarks. Housing providers are nervous because of uncertainty, and the vast majority of that uncertainty is because of macroeconomic policies that have been set in Westminster.
Any initiatives must look at the overarching housing sector in the round. Therefore, I would like to ask the minister what specific assessment has been carried out of the effect on the availability of housing supply of the proposed changes. Will there be check points on supply against demand?
We are in difficult times. With strictly limited powers, it is hugely difficult to extend tenant protections and to ensure that the environment for investment in new housing is optimum. The UK Government has used the property market to give the illusion of wealth and growth, leading to a bloated asset class.
This is my last sentence.
Despite the complexities that I have outlined, fundamentally, the Scottish Government has a duty of care to citizens, and for that reason I absolutely stand by the legislation.
Before I make my contribution, I refer members to my entry in the register of interests.
I am happy to have the opportunity to speak in the debate. This action is welcome, but it is long overdue. From the beginning of the cost of living crisis, Scottish Labour has called for real, measurable action to help those people in most need—from a windfall tax on energy companies that make eye-watering profits while working people struggle, to a rent freeze to support tenants who have been exploited by rogue landlords who increase bills during a time of severe economic uncertainty.
It is therefore welcome that the SNP-Green Government has U-turned on the issue of rent freezes. Let us not forget, however, that if the SNP and Greens had backed the proposals of my Scottish Labour friend and comrade Mercedes Villalba in June, the rent freeze would have been in place months ago, and tenants would not have had to wait until December—a point that the First Minister had implied would not be the case.
I do not expect the member to accept this point, but I put on record one more time that, had we voted for that amendment and had Parliament passed it, the rent freeze would not be in place—the bill would have gone to court and been struck down, and we would have done nothing but harm.
The proposed rent freeze from the SNP and Greens will not help those people whose rents were hiked over the summer after the Government’s failure to support a rent freeze in June. The average rent in Scotland was £780 in April, when Living Rent and my colleague Mercedes Villalba first raised the need with the First Minister; it now stands at more than £850, which we can agree is a significant increase in just six months.
Clearly, this is not the time for patting the back of a Government that, before the summer, said that the scheme was unworkable. It is a time to highlight the power of working people, of our trade unions and of their campaign to deliver this change. Inaction and empty promises were never going to be enough during a cost of living crisis, and I am pleased that the Scottish Government has come to that realisation.
I agree with the Scottish Government that the cost of living crisis is a result of years of irresponsible Tory economic policy, of austerity, of cutting taxes for the rich and increasing costs for the workers. However, in Scotland, we have powers to mitigate. We have powers in social security and through local councils to improve service delivery for those people who are most in need.
It is often suggested in Parliament that there is only one way out of this mess. In fact, what the past weeks, months and years have shown is that Scotland has two Governments that are often set on dividing communities. The fact that people power has brought about this change of heart in the Government highlights that the people of this country want to unite around policies that will improve their lives and set a brighter future for the next generations.
As members have highlighted, tenants and tenants organisations are knowledgeable enough to come to Parliament and give us sound advice that we should listen to the people of Scotland.
I am not sure that, when Scottish Labour envisaged rent control, it envisaged that the social rental sector would be such an integral part of the policy. Would Labour members therefore vote to remove it from the legislation, given the unintended consequences of the bill, which the sector’s representatives are raising with elected members?
The member knows from my colleague Mark Griffin that we will lodge amendments on that issue. We know that we are secure until the end of this financial year, but we are happy to debate the issue again tomorrow.
The introduction of the legislation is a welcome step forward. However, as members have mentioned, the bill will not help all tenants and is by no means a long-term solution to the challenges that Scotland faces in relation to the housing market.
Scotland’s councils have been starved of funding by the Scottish Government and the Tories in Westminster. In recent years, Labour in local government has been delivering nation-leading house-building programmes, despite the cuts. That is essential work, and we are proud to say that those programmes are delivering council housing once again, and are providing stability and security in the most uncertain of times.
As the member for Carrick, Cumnock and Doon Valley, Elena Whitham, said, a home is more than bricks and mortar. That is why we must challenge the balance between landlords and tenants, as my colleague Richard Leonard mentioned. I hope that the Scottish Government recognises the short-term nature of the plans that are set out in the bill. I call on the Government to invest in our councils to ensure that they have adequate funding to build the required quantity and quality of houses that are needed in Scotland today. Furthermore, I hope that the minister listens to calls for the rent freeze to remain in place until a national system of rent controls comes into effect. We know that we can be bolder and go further. I call on the Scottish Government to show that ambition.
I pay credit to my colleague Mercedes Villalba, tenants organisations such as Living Rent, and the trade union movement for their relentless campaigning to force this U-turn. It is a welcome step that will have a positive short-term effect. Scotland is in desperate need of a reformed housing policy that delivers first and foremost for our working population. Today is a step forward, but there is room for us to go further.
I reaffirm my party’s support for the principle of the bill and I highlight our commitment to delivering a long-term housing strategy that meets the needs of our populations.
I am over the moon that the bill has been introduced. It was the highlight of a programme for government that announced many policies that will have great impact on people in the Highlands and Islands. The bill is radical and bold, and has wide-ranging benefits for tenants.
Reading the policy memorandum last night made me proud to be a member of the SNP. Whatever safeguards or caution is in the bill, the intent is very clear: to protect tenants by stabilising their housing costs, to protect their health and wellbeing, and to avoid evictions.
The Orkney News yesterday that this rent freeze, during a cost of living crisis, will ultimately save lives. I have no doubt that that is true. In the run-up to winter, making sure that people who are paying rent—even rent that is already unfairly high—are able to stay in their homes must be our priority.
I noticed that Tess White asked a question today on the growing challenge of policing mental health and challenged the Scottish Government to do more. Does the member agree that housing security is a key wellbeing indicator and that the Tories’ opposition to the provisions in the bill that seek to provide such housing security is hypocritical?
I absolutely agree that housing is integral to mental health. There is a lot of hypocrisy coming from members of the Conservative group today: they claim to care about mental health but they do not support the bill, which has supporting the mental health of tenants listed as one of its specific aims. The Conservatives claim to be worried about the amount of time that we will be spending debating the bill, yet they are wasting an awful lot of it on things that have nothing to do with the content of the bill.
It is also worth reflecting on the fact that the bill is not the only way that the Scottish Government is supporting tenants with household bills and low income right now. Many will be benefiting from housing benefits—including mitigation of the bedroom tax—the Scottish child payment, the uplift to Scottish benefits, best start grants, and many other progressive policies brought forward by the SNP Government.
Nobody can accuse the Government of oversimplifying and trying to address this incredibly complex issue with only one action, or of thinking the bill is a panacea—at least not without looking a bit ridiculous. There is world-leading work going on in this building: legislation on social security and homelessness that is unprecedented, although constantly criticised by the Conservatives, who I can only assume would rather see us protect the growing wealth of bankers.
Frankly, I cannot believe the brass neck of some Conservatives who are claiming that it is not an emergency bill and have criticised this action, which is only necessary thanks to the shameful string of right-wing, harmful policies announced by the UK Tory Government, from cutting universal credit, to not only failing to act on but being complicit in the increase in the cost of energy, which is linked to eye-watering profits for energy companies.
It is a great pity that the Scottish Government, which is carrying out such progressive and impressive work—particularly in the social justice, housing and local government portfolio—is so constantly and hugely hamstrung by not having full fiscal powers; not being able to rely, even from month to month, on what our budget is going to be; and not being able to legislate on many of the biggest causes of poverty in Scotland today, such as energy policy.
Renting was already extortionate before the cost of living crisis, before Covid and before Brexit, and all those things have only made the situation worse. The Scottish Government is taking brave action to protect those who need protection most and ensure that tenants can keep a roof over their heads. That must surely be the most important consideration in the debate.
I recognise that there is a need to be able to defend the legislation not just to our electorate but legally. The bill has to be robust and strong, and the Government has to have confidence that it can defend the bill to the hilt—otherwise, it would be irresponsible and dangerous to present anything. That is particularly important when we consider that, while landlords and letting associations often have the money behind them to take legal action, tenants generally struggle to do the same. We must be careful not to create policy that is based on which group is most litigious, so I echo my colleague Elena Whitham’s call for the financial support that is available to tenants to be well advertised and accessible. We have to make it as easy as possible for tenants to access help.
I also agree with Elena Whitham’s comments about sitting tenants being able to remain in a home when the owner changes. It was pointed out to me this week that, if a commercial property were being sold, a sitting tenant would be seen as a positive, as it would mean immediate income following the sale. If a new owner does not intend to live in a property, perhaps we need to encourage an attitude shift towards supporting existing tenants to stay in their home. Rented or owned, a home is a home.
Over the summer recess, I told constituents that I was looking forward to coming back to the Parliament because we had so much to get through. Unfortunately, we have lost a week of business since the recess. Even in that context, the bill is worth spending three days—and possibly evenings—debating.
Let us make sure that we have a debate and not a foregone conclusion. I am sure that we will hear cracking arguments over the next two days about the finer points and about whether we can or should go further—particularly from Labour members, given that we start from the same position that this is emergency legislation to respond to an emergency situation and that tenants must come first.
There is always more that can be done on housing and always something that we could go further on in theory. I do not envy those who have to narrow down actions to what can be done in practice. I look forward to taking part in the debates and I hope that, in this room of legislators, there will be a commitment to explore ideas, to look into possible changes and to really consider whether suggestions to strengthen the bill are doable and defendable.
T his is a crucial week for tenants across Scotland. We are living through the worst cost crisis for generations, with inflation soaring and bills skyrocketing. One of the biggest expenses that people have is housing, which is why this emergency legislation is so important. It will provide immediate support to tenants who are at the sharp end of the crisis this winter.
I welcome the bill, which will implement a zero per cent cap on rent increases and will significantly ramp up protection for tenancies from evictions until at least 31 March 2023. It will create a new system to make it easier for tenants to challenge unlawful evictions and it will bring in tougher sanctions for landlords. It will also grant ministers powers to reform how tenants can challenge rent rises in the private rented sector after the freeze. Those priorities stand in stark contrast to the cruelty and incompetence of the UK Government in its so-called mini budget, which is a multibillion-pound giveaway to the bankers, the polluters and the superwealthy.
The bill is part of a bigger whole. Although Scotland already has the strongest tenants’ rights in the UK, the Bute house agreement sets out why we need to do much more to reform renting.
I repeat that 1984, 1988 and 2016 acts cover rental agreements. They regulate by how much rents can increase and they provide a mechanism for disagreeing. Does Ariane Burgess know what the relevant sections are and what options are available to tenants? I would be happy to explain that, if the Presiding Officer would allow the time.
I really appreciate Edward Mountain’s long-standing knowledge and experience in Parliament, and his sharing that earlier in the debate, but I would like to press on with what I have to say.
Over the course of this parliamentary session, we will introduce the biggest expansion of tenants’ rights in more than a generation, including better protections against eviction, improved regulation, more rights and long-term rent controls. That was a core part of the partnership agreement between the Scottish Greens and the Scottish Government. It is part of our journey that is set out in the Bute house agreement to make rents less about maximising profit from homes and more about affordability, quality and tenants’ voices. That vital work continues and will contribute to the biggest package of housing sector reform since devolution.
Renting in Scotland is too often expensive and insecure. Too many tenants pay extortionate amounts to live in damp, cold and overcrowded homes. No home can be left behind if we are to build a recovery that works for people and communities.
No, thank you. I am going to continue.
In the Highlands and Islands region, which I represent, the need for affordable, accessible and adequate homes continues to be pressing. Many people struggle to find a home in which they want to live. If they do so, they face unaffordable rents. The deepening cost crisis has left few people unscathed, but many people who rent their homes will be even more vulnerable to the harsh winter ahead. If the United Kingdom Government will not act as it should, the Scottish Government should do all that it can. Protecting people from rising rents and from losing their homes is the right thing to do, as winter looms.
Ariane Burgess talked about building new homes. I have a letter from a housing association that says:
“a rent freeze means housing associations ... will have to cut back on improvement and maintenance programmes. This greatly reduces our chance of meeting the Scottish Government’s targets on building new affordable houses”.
Does Ariane Burgess recognise that consequence? If so, why is she voting for the proposed legislation?
For the period that is covered by the programme for government, the vast majority of—if not all—social landlords would not be raising their rents anyway. Some social landlords have frozen rents this year, and others have set up extra assistance for tenants who are hardest hit by the cost crisis. In his role as minister for tenants’ rights, Patrick Harvie has committed to working closely—I heard it this morning at committee—with social landlords if measures are extended beyond March, to ensure that there is no adverse impact on long-term plans for more social housing.
There is plenty of common ground to build on in ensuring that all renters have rents that they can afford during this stressful period.
I am proud that Scotland is leading the way on protecting tenants. No other part of the UK is proposing anything close to the Scottish Government’s ambition on protecting tenants. It is part of our journey towards joining the norm in other European countries, where regulation of rents is built in to the way housing works.
In the short term, the emergency bill will make a substantial difference this winter for people who rent their homes. Ultimately, however, we need long-term solutions. Part of that is a culture change—a move away from housing being seen as a money-making investment towards a culture that is about providing homes for people.
With the powers of an independent country, Scotland could do much more to tackle the cost crisis head on. The bill shows that the Scottish Greens, working constructively in government, are delivering on the promises that we made to the electorate in 2021.
I speak in support of the emergency bill, which will secure a number of welcome and essential provisions. As we have heard this afternoon, the main provisions are a six-month rent freeze for tenants across tenures and a ban on evictions across tenures for the same period of time.
Those measures will be welcome and valuable for many hard-pressed tenants across Scotland, including in my constituency of Glasgow Maryhill and Springburn. They will give certainty, stability and support for many people for the next six months, which will be very welcome, given—if we are honest about it—a cost of living crisis that is fuelled by a Westminster Government that has been complicit in the crisis due to its reluctance to regulate and tax the energy sector.
The measures will also be welcome, given the Westminster Government’s keenness to cut budgets for the Scottish Parliament and to herald in austerity, and its refusal to acknowledge the need to go further on public sector pay awards across the board.
The bill takes a measured approach. There are reasonable caveats built in about when it might be appropriate to trigger a rent increase or to move for eviction during that six-month period, to make sure that the bill is legal and competent. We had that debate before on Covid emergency legislation, and Patrick Harvie’s exchange with Richard Leonard earlier sums up the need to get the balance right to make sure that the bill is legal.
However, I need to flag up potential unintended consequences for the social rented sector, as I have done before in Parliament. Within days of the announcement, I met three social housing providers in my constituency, and I have been contacted by several more. Housing associations are anchor organisations in the communities that I serve. They have great value, and not only in respect of how they invest in their core rental stock to improve it and bring it up to the energy efficiency standards that we all need to meet to tackle the climate emergency. The Scottish Government supports housing associations with grants that are underpinned by borrowing from the finance sector. Housing associations are building the next generation of social rented housing, and we must secure those gains and go further. I see that happening across my constituency.
I also see the wider activities of housing associations in my constituency, including work to tackle loneliness and isolation in the communities that I serve, support for vulnerable groups and provision of welfare advice and, increasingly, food and fuel support. They make a difference in the communities that I serve.
All that investment in stock and in the communities that we serve is, in part, predicated on rental income from tenants, and we have to remember that. When housing associations raise significant concerns, we must listen carefully.
The member is right to say that he has raised those concerns before. Does he accept that housing associations’ genuine concerns could see the investment that he has talked about being choked off by the measures in the bill?
I do not think that that will happen, because I have an on-going dialogue with housing associations. They are making representations to the Government, and the Government is in listening mode. Mr Simpson is right to raise those potential concerns, but I do not think that that will happen. I thank him for raising that point.
I have made clear the important role that housing associations play in my constituency, and we have heard this afternoon that they plan their finances over 10, 20 or 25-year periods. They are sensitive to year-on-year variations in their predicated rental incomes, including where there are constraints on the ability to raise rents. We have to be cognisant of that.
I acknowledge that they have a rent affordability tool, which they seek to use, and that they are statutorily required to consult tenants. We have to look at that in the context of any potential rent freeze.
I do not have time, so I have to say no.
I point out that housing associations—not always, but by and large—have shown constraint in the past few years. Maryhill Housing Association in my constituency had a rent freeze in 2020. That had consequences for its finances for a time, but it found a way to have that rent freeze.
Housing associations make different decisions at different times and have different trajectories of rent increases over the years, depending on their investment priorities and the pacing of that investment.
When we talk about a rent freeze, we should be cognisant of that being a rent cap at zero per cent. If a rent cap was to include the social rented sector in the future, that figure would not have to be zero per cent. It could be higher than that or it could be set at a different rate—if there is to be a cap at all, of course. A different cap could take into account the statutory consultation process that housing associations have with their tenants, the previous rent increases that housing associations have made over a number of years, the constraint that they have already shown and a variety of other factors.
Overall, my preference would be for partnership, conversation and co-production with the social rented sector, rather than for a rent freeze and rent cap more generally. However, we are in unprecedented times. We must think about every way in which we can support the most vulnerable people in society. That includes considering freezing rent across all tenures. I hope that that does not happen in the social rented sector it, and I have put on record what the unintended consequences of that might be. We must continue our dialogue and keep working with the social rented sector.
The bill is a disgrace. This is not the way to do legislation. Emergency legislation should be an exception that is reserved for wartime or a pandemic, or to make quick updates to law when needed. The bill does not qualify. This is a complex policy area; we cannot rush this sort of thing.
I convene the cross-party group on housing, which has produced a report on rent controls. The report took months to produce and was meant to help the discussion around the issue. I will come on to its recommendations, but the report shows that we cannot and should not pass this sort of legislation in three days, with MSPs given less than a day to scrutinise it beforehand. If the bill is passed, it will wreak untold damage on the very people that this Government and its Green partners purport to stand up for.
The legislation is an attack on the entire rental sector, fuelled by the Greens’ hatred of anything private.
The bill applies to councils as well as to the social rented sector, which Bob Doris spoke about in his speech.
The Greens see private rental sector landlords as being inherently bad, up to no good and generally out to make a killing off the backs of tenants, as does, apparently, my good friend Richard Leonard. How wrong can they be? The Government has produced rushed and flawed legislation that attacks the social rented sector, which has been up in arms about it.
Others have already spelled out the sector’s concerns, but they are worth repeating. As the Scottish Federation of Housing Associations said:
“This policy will do little to increase the incomes of most social housing tenants. Instead, it will threaten both the Scottish Government’s ambitions on affordable housebuilding and climate change, and our members’ ability to provide their tenants with exactly the kind of targeted support that is required in these times.”
There is no problem with high rents in that sector, but there will be a problem with investment if the bill goes through. Any ambitions for targets on the building of affordable homes can be thrown out of the window.
The SFHA warns of “dire consequences”. The Glasgow and West of Scotland Forum of Housing Associations fears that the bill could be a precursor to something permanent. It said:
“State intervention in our sector’s rents after March 31 2023 would set a very worrying precedent and would savage plans to invest in existing and new homes”.
We know that such intervention could indeed continue beyond March next year because that is provided for in the bill.
Does the member accept that David Bookbinder from the
Glasgow and West of Scotland Forum of Housing Associations said that he could live quite happily with a freeze up to the end of March next year?
He did say that, and I will come on to that point.
Andy Young of East Kilbride Housing Association told me that the bill has united the sector like never before and will make the delivery of net zero impossible. It is quite something that a Green minister is taking a wrecking ball to a policy that helps the environment.
Today, we have had stark comments from people in the sector who know what they are talking about. David Melhuish, the director of the Scottish Property Federation, warned that the bill could lead to £3.5 billion of planned investment in new private rented accommodation being withdrawn. That would be quite an achievement.
John Blackwood, from the Scottish Association of Landlords, is a mild-mannered man who, until now, has never been party political in all the time that I have known him. He says:
“With this Bill, the SNP and Greens have put political rhetoric ahead of measures that would achieve real results in solving Scotland’s housing crisis ... They have neglected the housing sector in Scotland, leaving it to crumble.”
He calls the bill “irresponsible”, and he is right.
The rent control report that I mentioned was balanced in a way that the bill is not. It looked at evidence from across the world, and we discovered that there is a lack of robust data on rents in Scotland. What data there is shows a mixed picture across property types and different parts of the country. A one-size-fits-all approach is simply wrong in my view. Our report did not ask whether rent control is desirable; it was a discussion paper that assumed that it was coming. The minister has been sent a copy. If he has read it, he will know that, if the provisions in the bill are extended, there could be severe consequences. There are different ways to control rents, and they all have pluses and minuses. As I said, the situation is complicated.
I will come back to the point that Mr Mason made. The fear in the sector is that the rent freeze will continue beyond March 2023. That is the real concern, and the bill contains such provision.
Patrick Harvie has not taken a considered approach. He has taken a mallet to the sector. Such a haphazard and blunt approach to law making must be resisted.
This dreadful cost of living crisis is being felt across the country and is resulting in human misery and great harm. Many of my fellow Dundonians and many others across the north-east are struggling to feed their children, are missing meals themselves and have no idea how to pay their ever-increasing bills.
Paying the rent accounts for a huge slice of a family’s income. Parliament must intervene at this moment of crisis; we are right to do so. However, we cannot do so blind to either the causes or the various impacts of our actions. The only long-term solution is to increase housing supply, and we must guard against actions beyond the immediate emergency that further decrease that supply.
My remarks will principally address the issue of student hardship, the impact of the proposed legislation on our universities and the need for long-term solutions for university accommodation.
One in eight Scottish students has experienced homelessness since the start of their studies, one in three has considered dropping out due to financial difficulties, and one in four is unable to pay their rent in full, so it is little wonder that the National Union of Students Scotland has welcomed today’s action on housing costs.
However, Universities Scotland has raised with me well-founded practical concerns about university halls of residence and the impact that the legislation could have if it is extended in the way that the bill allows for. If the provisions are extended beyond the end of March and rent rises are capped well below inflation, it is likely that that will cause significant challenges. The costs of operating such facilities are subject to all the inflationary pressures that are found elsewhere in our economy. Those costs include the employment of staff, some of whom are, it would be fair to say, not particularly well paid. We must remember that universities are taxpayer-funded institutions with a vital social purpose, and that they are already facing 8 per cent budget cuts from the Government.
Why are we here? The inflationary shocks that are ripping through Britain have been triggered by the invasion of Ukraine, but we are being particularly badly hit compared with other countries because of the chronic failure of the UK and Scottish Governments to ensure that we have a resilient economy with energy self-sufficiency and robust supply chains—an economy based on innovation and productivity rather than debt-fuelled consumption.
Market shocks such as the Kwarteng mortgage premium are ruining the lives of many hundreds of thousands of people. The Tory chancellor’s grotesquely inept mini-budget has added £1,500 to the average mortgage borrower’s annual bill and has resulted in hundreds of mortgage products being withdrawn and soaring costs for those seeking to buy. That demand shock will be felt for years, and it will further chill Scotland’s house-building sector, all for zero benefit, given the ridiculous series of U-turns that have been undertaken in recent days.
The problems for universities and students are particularly acute. The Scottish Government imposes a business model that drives international recruitment to pay for the cost of Scottish students, which has meant a 27 per cent increase in student numbers in the past decade. At the University of Glasgow, which members have already cited, student numbers have risen by 20 per cent in only four years. That is a dramatic and substantial change that would play havoc in any marketplace for accommodation. Despite that 20 per cent rise, there has been only a 10 per cent increase in the available housing for students that is provided by the university and through purpose-built halls.
I thank the member for raising that important point. There is a huge shortage of accommodation across university campuses, and the private sector fills in those gaps. However, the key question facing us is whether the bill will make that situation better or worse, given the sheer demand for properties and the lack of properties on the market already.
It is pretty clear that a balance has to be struck. We need emergency action to deal with the costs that people are facing—that includes students, some of whom are facing absolutely unacceptable rent rises—and we need to ensure that there is long-term supply. I share the concerns about long-term supply in the student marketplace. One university has already told me that developers are cancelling projects, given the current circumstances that they face. We have to ensure that there is the possibility of bringing supply back online as soon as possible.
The national story on student housing, which has been alluded to, is even more concerning. The latest statistics show a 14 per cent decrease in the number of private sector halls and university-provided accommodation. All of that has delivered a marketplace with no capacity to absorb external shocks. We therefore have students being told by the University of Glasgow to defer courses and put their life plans on hold. There is no real strategy that I can see. Frankly, there is not even an understanding from the Government that, if it insists that our universities pursue a never-ending growth strategy, it must put in place the policies to make that possible. In short, if we have more students, we require more houses, but universities have told me in recent days that things are going in the opposite direction.
The rent freeze is an emergency measure, and it is right that we act.
I am absolutely not making such a case. Mr Kerr has not listened to the totality of what I am saying. There is an urgent need to ensure that we freeze rents across the country. My concern is that, in the long run, we have to bring supply back online as quickly as possible, and that requires engagement from the Government in doing that work, which has been sadly lacking so far.
Paul Krugman has said that rent freezes are
“among the best-understood issues in all of economics”, and that is precisely because they have been tried in many places, many times. Long-term rent controls will inevitably choke off supply, and it is supply that is the honest answer—the only answer—to ensuring that more people have a place to call home.
We have had a hugely damaging budget from the Conservatives at Westminster—it was so disastrous that even the Conservatives at Westminster would not back it. Thankfully, the Conservatives have now backed down on abolishing the 45 per cent rate, but there is very little in the budget to help those who are struggling the most. The question is: how can a much more reasonable SNP and Green Administration tackle poverty and inflation with the limited powers that we have?
Let me get going a wee bit.
Rent is a key and essential part of many people’s expenditure, and it is something that the Scottish Parliament can impact on, so it makes sense to look at what we can do on it. We have all heard the accounts of dramatically increased rents, especially in the private rented sector. It seems that some landlords have been increasing rents to as much as the market will accept rather than linking increases to inflation or actual costs. Therefore, I fully support the action to tackle the issue through the bill. However, not all landlords have been increasing rents in that way.
Earlier, I mentioned a report by the cross-party group on housing. One thing that we found was that there is a lack of robust data on rents in Scotland. Does the member agree with that?
I am sorry. I am not on either the committee or the cross-party group, so I would struggle to comment in detail about that.
Not all landlords, though, have been increasing rents in such a bad way, and I think that we have a challenge in drafting legislation that will restrain the bad landlords without punishing those who have been responsible. Some landlords in both the private and social rented sectors have kept rents down in recent years and therefore do not have reserves or savings to absorb a rent freeze.
Housing associations, in particular, have been in touch in recent days, as Mr Doris and Mr Rennie have already said, and we had the Scottish Federation of Housing Associations at the Finance and Public Administration Committee last Tuesday. Its main points would be that housing associations have been keeping rents below inflation in recent years; they were looking at increases of perhaps 5 per cent or 6 per cent next April, which would be well below inflation of 10 or 13 per cent.
No—I will carry on, if you do not mind.
Even that level of increase would mean curtailing new building. One association based in my constituency told me that even without this legislation, it had agreed with lenders to borrow £90 million in the next few years, which was partly to refinance existing loans and partly for development. It is now reducing that borrowing to £50 million purely to refinance and complete existing projects. It will not commit to any more new build for the time being.
If rents are frozen from April, housing associations also tell us that improving properties for energy efficiency will have to be put on hold, further restrictions on rent could mean staff reductions and reduced maintenance, and the main beneficiary of a rent freeze, as has been pointed out before, would be the Department for Work and Pensions, which pays 60 or 70 per cent of all rents.
The problem for most housing associations seems to be that they have to balance grant receipts, what they can borrow, reactive and cyclical maintenance and rent increases. Any surpluses or deficits go into or out of that same pot. I used to work in the sector as an accountant and can confirm that that is the case. Therefore, restrictions on rent increases inevitably mean cuts elsewhere.
I accept that even housing associations are not all in agreement. Members may have seen that Parkhead Housing Association, which is in my constituency, had a letter in
The Herald yesterday arguing that there could and should be a freeze of up to a year, or perhaps even more, although it would want to be allowed to catch up again in the future. However, I do not think that that is the thinking of the majority.
I noted that, at paragraph 37 in the financial memorandum to the bill, it is accepted that,
“If a freeze is extended post 31st March 2023 the Scottish Government may be required to provide resources to protect RSLs whose financial viability is threatened due to loss of rental income.”
That strikes me as a scenario we do not want to be in.
Do you think, if we have to go ahead with the legislation, that a better way forward would be simply to have a six-month freeze up to March and then, if we need to do it again, to introduce primary legislation at that point, so that housing associations have a better idea of what is going to happen, rather than having this dagger hanging over them for another 12 months?
I think that we want to review things in April, so that there would perhaps be more differentiation between good and bad landlords, as I have suggested. I also point out to Mr Balfour that I think he suggested in his speech that the Government would have power to extend beyond 31 March, whereas, in fact, that is not the case: Parliament will have the opportunity to make that decision.
Finally, in relation to local authority housing, which we do not have in Glasgow, COSLA made the point in its briefing that
“Rent caps are really not needed for ‘affordable housing’ as it is ‘affordable’.”
Therefore, I have series of questions to ask in this stage 1 debate. Are we distinguishing enough between responsible landlords—both RSL and private landlords—who have kept rents down in recent years and those who have made excessive profits? Could we take past rent increases into account—over the past three to five years, for example—when we set limits going forward? Should it be an actual cap in money terms or should it be in percentages, so that landlords with existing lower rents even within the social rented sector are not disadvantaged?
I realise that I am running out of time, so I would just welcome the fact that the legislation is to be in place up to 31 March and that it is going to be reviewed during that time. I hope that, in the new year, we can revisit it and consider different options after 1 April.
People across the country are in dire straits. The Tories have abandoned them and the SNP is not doing enough, either. I agreed with Patrick Harvie when he said, in his opening remarks, that we are in a humanitarian crisis. Although the mortifying UK Government U-turn on income tax might hold back some of the damage that was irresponsibly inflicted on the pound last week, we have now seen just how willing the Prime Minister and her chancellor are to play games with our economy and people’s lives. Their haphazard approach in introducing such severe economic measures with no consultation, no forecasts and no Cabinet oversight, is terrifying.
I would welcome any measure, but that one has been largely wiped out by what the UK Government has done in recent weeks.
I know that the SNP agrees with Labour about the recklessness with which the Tories have wreaked havoc on our economy. Paul McLennan certainly made that clear. That is why I cannot help but wish that the SNP had not squandered opportunities to take action on rent years ago, when my colleague Pauline McNeill suggested it. It is also why I wish that, more recently, in March, it had not copied the Tory scattergun cost of living mitigations and, in so doing, missed the opportunity to divert support to the people who needed it most. Instead, the SNP, too, lined the pockets of the wealthy while failing to do anything specific for disabled people and unpaid carers and barely scratching the surface for low-income families. Meanwhile, members on the Labour benches were writing the SNP a fully costed plan that set out how to do just that, using a targeted approach rather than spreading the money so thin that its impact was diminished for those who were feeling the heaviest weight of the crisis. Of course, that plan included a temporary rent freeze and a winter evictions ban. My colleague Mercedes Villalba put forward a vote on exactly that back in June, and SNP and Green members refused to vote with us.
I am pleased that they have listened to us, Living Rent and the trade unions and that, today, they share the Tory penchant for a U-turn and have come round to the idea. However, I stress to the Government that there are real-life impacts to its delay, as members have already heard in grim detail from Mark Griffin. In the time since we urged the Government to take action, rents have already risen, as Carol Mochan has clearly set out. My inbox is filled with emails from constituents in Glasgow who are unable to afford a roof over their head—in particular, disabled people, young people and students. My colleague Michael Marra has eloquently set out the challenges that students face, which must be addressed. More families are finding themselves homeless than ever before, with the homelessness rate among children increasing by 17 per cent since last year.
Delays have consequences and brave Governments take action without delay. Many people are facing rent increases that have been enforced over the summer months as some landlords responded to the cost of living crisis faster than the Scottish Government did. A rent freeze now is too late for those people. Had the Government listened to Mercedes Villalba in June or to Pauline McNeill in the previous parliamentary session, those people would not be experiencing those rent increases.
It is not just delays that have consequences. The lack of ambition and scale of change of the Greens and SNP have consequences, too. Richard Leonard set those out today, perfectly angrily, and I was disappointed to hear the minister’s response. I am old enough to remember when Patrick Harvie would have been squarely on the side of tenants.
Like other members, I would like reassurance on the wider impacts of the bill and, specifically, I would welcome the Government’s reassurance that the bill will not impact the social housing programme and that social housing landlords will not face a black hole of costs to make essential improvements to their homes if the freeze is extended. On that point, I ask that, in the minister’s closing speech, he tell the Parliament the date when it will be able to vote on his recommendations on the decision to extend or change the provisions of the bill so that registered social landlords can plan for the future.
I agree that demand is outstripping supply and that not enough work has been done on that, but that does not address the problem that we have right here, right now.
The SNP’s failure to act quickly enough on rents was a failure to protect my Glasgow constituents and others across Scotland. The SNP has not just let them down on pace; it has let them down on scale. We heard today, not for the first time, that the SNP and Greens have put £3 billion into the cost of living crisis. They have not done that, and we must say so. That figure includes actions from years and years ago, some of which the Labour Government legislated for. According to the Scottish Parliament information centre, the actual figure for the cost of living interventions from the SNP-Green Government is a sixth of that, at closer to £500 million. That is welcome, but I ask the Government not to inflate its actions while families cannot feed their children. All that does is mask reality and lead to complacency.
Scottish Labour has set out a platform of ideas for the Government to pick from and that could raise the scale of the support on offer. Sadly, there is an inevitable pattern of shouting down those ideas. Cabinet secretaries say that they welcome ideas from across the chamber, but they do not act on them. Maybe this bill is a turning point. If so, I would like to seize the opportunity and invite the Government to consider our suggestions for further action.
The Government could make transport more affordable by halving rail fares and freezing those for a year, creating online fuel price checkers and supporting local authorities to reduce the cost of bus journeys. The Scottish Government could not only save people money on crucial outgoings like transport or give them a rebate on their water bills, it could also help people to get out of problem debt. People are now taking on debt just to afford basic essentials such as food and rent, not to pay for TVs or holidays. I hope that the Government will consider action on debt in short order.
When the Social Justice and Social Security Committee carried out our inquiry, we heard that public authorities often aggressively pursue debt, so there is much that the Government could do on that, including by ensuring that people who are in debt keep more of their money by raising the threshold of protected income and by protecting funds from carers or disability benefits. Not to do so creates the risk of destitution.
Action should also be taken to write off school meal debt. Aberlour found that 11,000 families across Scotland are unable to pay for their children’s school meals. Labour-led South Lanarkshire Council has already set the gold standard here by wiping out existing school meal debt, providing relief to my constituents in Rutherglen. The Government could and should do the same across Scotland.
In addition, £250 million of council tax debt was referred to sheriff officers in 2021. If the SNP had kept the promise to abolish council tax that it first entered Government on, that debt would not exist. However, it does and it is crippling people who are struggling. We believe that the Government should consider what more it can do to ease the burden of council tax arrears.
Having been on the back foot after the pandemic, people are being pushed to their limits by the cost of living crisis. They need support, which is why it is essential to properly fund money advice services, which are stretched to their limit. We must ensure that they have the resources that they need to keep providing lifeline services to anyone who turns to them.
I welcome the aim in the bill to address the health and wellbeing impacts of unaffordable rent rises and ask the Government to set out in closing what it will do to support third sector organisations to help people.
Scottish Labour, as the original proponents of the rent freeze, will support the bill, but we believe that there is far more that the Government must do to address the cost of living in Scotland. We have simple, cost-effective solutions in front of us to do that. I hope that the Government will consider those wider actions, not delaying as it did on rent freezes, and will set in motion the wider action that is needed to get people through the cost of living crisis and ultimately to save lives in Scotland.
I remind members of my entry in the register of members’ interests. I am a member of the Law Society of Scotland and also have an interest in two residential properties that are let on a long-term basis.
It takes a particular type of Government to identify a problem that affects hundreds of thousands of Scots and then to actively propose a change in the law that will make matters worse for those people. It takes a particular type of Government minister to put forward a policy when the evidence suggests that it will exacerbate the problem that he claims he wants to solve. That is what we have in the bill before us.
I will start with a word about process. Graham Simpson talked about the fact that the bill is being rushed through Parliament in three days with no time for detailed scrutiny or for consultation with those who are affected. Mr Simpson is the convener of the cross-party group on housing: he is something of an expert in the field and probably knows what he is talking about on this subject. He commented on the fact that Parliament is rushing the bill through. We first saw the bill at 5 o’clock last night. There is no time for Parliament to give it the scrutiny that it deserves, given its wide-ranging consequences, which we have heard about in the debate. Rushed law is bad law, and I fear that that is what we are about to make.
There are already significant issues with the provision of private rented accommodation across Scotland, particularly in our cities. Rents have been rising—that is true—fuelled by a shortage of available accommodation. Roz McCall reminded us that, just two weeks ago, the University of Glasgow was advising students that they might have to consider either suspending their studies or withdrawing from courses due to the chronic lack of rented accommodation in the city.
Just last week, we heard that students in Edinburgh were having to be offered beds in dormitory-type accommodation because there was simply nowhere else for them to stay, and letting agents report that there has been a significant and on-going reduction in the number of private-sector tenancies coming to the market.
Mr Fraser’s very passionate concern about supply, I am surprised that he has not whole-heartedly welcomed the measures that we have taken in relation to short-term letting, which has siphoned off what should be proper, affordable homes for people into, in effect, untaxed hotel businesses.
Mr Harvie does not even want to talk about the bill that he is proposing today, which is the one that is going to have a negative impact on the supply of rented property.
We are already seeing private landlords who are frustrated by changes in tenant legislation withdrawing their properties from the market, selling them up or putting them into other use such as short-term lets. Those properties that are available too often see a bidding war and higher rents.
Does Murdo Fraser agree that the SNP-Green Government has failed to see the bigger picture? We have just heard about that. The interests of tenants and the interests of landlords are not in opposition but, with the prevention of any and all evictions and the freezing of rents, which sounds like an easy, short-term solution, tenants may lose out in the long term.
I absolutely agree with that intervention from Mr Carson, who makes his point very well.
I can understand that the Scottish Government, in response to the rising cost of living, thought that it was clever politics to bring in a six-month rent freeze to apply until the end of March next year, but it seems that it did not consider that that would exacerbate the difficulties that we have already seen in the private rented sector. John Blackwood, the chief executive of the Scottish Association of Landlords, said that, in response to what was announced by the Government, he had been
“inundated by landlords saying they will be removing their vacant properties from the rental market”.
The consequence of the bill will be to reduce still further the availability of properties in the private rented sector, leaving students and others in an increasingly desperate situation. It is simply unbelievable that we have a Scottish Government and a minister who are so arrogant that they cannot see what the outcome of their actions will be. At least we heard from Michelle Thomson, on the SNP benches, a recognition that there will be an impact on the supply of properties if the bill goes through.
However, it is not just in the private rented sector that we see concerns. A number of members including Willie Rennie, Bob Doris, Graham Simpson and others talked about the impact on the social rented sector. The Scottish Federation of Housing Associations, which represents the providers of social housing across the country, has warned that the policy will threaten both the Scottish Government’s ambitions on affordable house building and those on climate change, as well as its members’ ability to provide their tenants with exactly the kind of targeted support that is required in these difficult times. It says that several of its members have already been forced to cancel plans for kitchen and bathroom renovations for the next several years due to the projected loss of income from the bill.
We have also heard—and we heard during the debate—that the massive investment in our housing stock that will be required to help to meet net zero ambitions will be jeopardised by the bill, as indeed will the construction of new social housing projects. Willie Rennie quoted Kingdom Housing Association in Fife, which I referred to in the chamber last week. It has expressed exactly those concerns, which a number of other housing associations have also referred to.
The bill will initially introduce a rent freeze for only six months, but there are real concerns that there are plans to introduce rent controls going further than that—a move that can only make the situation much worse. That point has been made very well by both the Scottish Federation of Housing Associations and COSLA.
On local government, I was interested to see the suggestion in the policy memorandum that, should the cap be extended, that
“will remove at least £50 million in income ... from the business plans of Registered Social Landlords, and at least £230 million over the four years to March 2027.”
Where is that money going to come from? Who is going to make that money up in the budgets of social landlords or of local authorities? We have had no answer on that point from the minister, so I hope that it will be addressed in winding up.
As COSLA said in its briefing, it is extraordinary that the Government is centralising power over rent setting—rent setting has never before been taken out of the decision making of local elected members as a sphere of government. Again, the Government has shown nothing but contempt for local government, and it is centralising power in its own hands.
As Stephen Kerr and other members reminded us, all the international evidence shows that rent controls cause housing shortages. That has happened in Ireland, where, following the introduction of rent control zones, as at 1 August, only 716 homes in the entire country were available for rent.
There are similar issues elsewhere. The average waiting time to lease a rent-controlled property in Stockholm currently stands at nine years. As Jeremy Balfour said, a grey market in rent-controlled properties has emerged in Berlin, in which landlords demand that, as a condition of renting, tenants pay a ridiculous price for furniture, kitchen appliances and other basic amenities, in order to get around the rules on rent control.
The danger is that we will see the same, and yet, rather than look at the international evidence, it seems that Patrick Harvie and everyone in the Scottish Government believe that, somehow, Scottish exceptionalism means that we can buck the trend and introduce rent controls here without the adverse impacts that have been seen elsewhere.
When it comes to the cost of living, serious issues need to be addressed. The UK Government’s substantial intervention to cap the cost of energy will deliver real benefits, particularly for those on low incomes, who spend a high proportion of their income on heating costs.
I am surprised that any Tory member would try to make that argument. Murdo Fraser must know that every penny of that, and more, is wiped out entirely by the rises in the cost of food and fuel, because of the inflation that is driven by his Government—and, for those who own their home, by interest rates that are going through the roof.
The Scottish Government has a record high budget—the highest in the history of devolution. What is it doing to help with the cost of living? It is making matters worse.
Perhaps the Scottish Government could look at supporting tenants to pay rent, rather than bringing in a rent freeze.
It claims to support landlords, who are facing additional costs. That is a fig leaf. In the event that costs and mortgages go up, landlords are allowed to increase rents by just 3 per cent. If interest rates go up, as the cabinet secretary has suggested—they might go up by much more—landlords will be left out of pocket.
Again, an SNP-Green Scottish Government is not listening to those in the sector, is not listening to those who represent letting agents and private landlords, is not listening to local authorities, and is not listening to those in the social rented sector. It is railroading through Parliament a piece of emergency legislation without proper scope for scrutiny and amendment, and is failing to properly consider what the intended consequences will be.
I fear that Patrick Harvie’s legacy, as a result of the bill, will be the driving up of homelessness in Scotland. That will be a sorry legacy. The Parliament should reject the legislation.
It has been—shall I say?—a lively and wide-ranging debate. The differences of views and the divergence of values among members have been well expressed. Some criticisms and concerns about the bill have been expressed seriously, and I will try to address those. Others have been a little more on the silly side. In particular, I find it difficult to take seriously Murdo Fraser’s accusation that we are only doing this because we thought that it was clever politics. That comes from the party that thought that it was clever politics to abolish the top rate of taxation, until it realised that everybody outside of Tufton Street was revolted by the values behind such politics.
I do not accept the premise that it will, and I do not accept that that is the only issue affecting rent rises. It is not the only one; there are also landlords who are raising rents simply—I quote a landlord—
“to keep pace with the market”.
That is simply exploitation.
I want to address some of the slightly more technical points that have been raised. In particular, there are valid questions around reporting duties on Government and decisions about how any possible extensions of the measures will be taken forward. There are questions about whether there will be robust planning and reporting. Those are very fair questions—
I would like to make some progress.
I engaged with the Local Government, Housing and Planning Committee this morning and offered to remain engaged with it on that point.
It is clear that, under the bill, we have to review its operation every three months and consider whether the provisions “remain necessary and proportionate”. We will have to review whether the rent freeze and eviction moratorium remain necessary and proportionate in the light of changing economic circumstances, and that will include considering the available evidence on the impact of the measures and how that changes over time.
That figure is not an absolute. A provision exists in the bill for the Government to change it, and we will look at that in the light of changing circumstances.
Throughout the debate, there were a number of calls for the Government to spend more money on all aspects of housing. Members should understand that, if we were able to throw more money than we have done already at direct tenant support, social housing provision, retrofitting, the cost of running the tribunal and the wider cost of living measures that Pam Duncan-Glancy mentioned, we would. We have a strong track record of prioritising those things, but we also have to say that we do not yet know what scale of brutal cuts are coming down the line from the United Kingdom.
I am going to have to make some progress.
The emergency budget review will have to consider all those things.
Several members have questioned the purpose and necessity of the measures, and I welcome the comments from Mark Griffin and members on the Labour benches, who recognise that thousands of people are being pushed to the brink in a crisis that is being made worse by the UK Government. Elena Whitham spoke of a “clear and present danger” from the current cost crisis and recognised that some of that has been at the hands of the chancellor over the past couple weeks.
The measures in the bill provide direct protection in terms of rent, but they do more than that; they also provide a sense of security. A good reason to ensure that all tenants in all sectors have equal protection, at least for the first six months, is to ensure that everyone has that sense of security. Emma Roddick spoke about the direct connection between a sense of being secure in one’s home and the impact on mental health.
I want to emphasise briefly a couple of aspects that did not come up very much in the debate, which I hope that we will discuss later in the week: the measures on penalties for unlawful evictions and the changes to rent adjudication. Those things will be very important in how the wider measures are implemented, and I hope that we will have further discussion of them later in the week.
Clearly, for some in the chamber, the provisions signal the end of private renting or some sort of imagined hostility that we have towards the rental sector, but, for others in the chamber, the measures do not go far enough.
Richard Leonard’s suggestion that the bill does nothing to strengthen tenants’ rights is, I am afraid, frankly absurd. It is very clear that some members think that none of this should be done at all, and others are demanding the impossible. Mr Leonard asked why we are not placing the onus on landlords. That is exactly what the bill does: landlords will be the ones who have the opportunity to apply for a prescribed set of costs to be taken into account, within clear limits.
Does he not accept that our argument is not that these should be simply temporary changes to the balance of power between tenants and landlords but that they should be permanent changes?
I do, and that is why the Government has a long-term programme of reform under the new deal for tenants, on which we have consulted and on which we will be working on permanent legislation. Richard Leonard is well aware that temporary, emergency legislation needs to be justified as being proportionate in relation to the immediate circumstances. That is what we are doing.
I will move on. A great many members spoke about what they see as being the potential impact on the social rented sector. That is extremely important to the Government. From their different perspectives in the debate, Miles Briggs and Mark Griffin shared their concerns on that, some of which are very legitimate. Some members suggested that the measure has already an impact on the rental income of RSLs. That is not the case. It will have no direct impact on the rental income of RSLs during the first six months.
Indeed, how about the UK Government having an immediate impact on RSLs’ borrowing costs? Just today, during the debate, we have seen—yet again—a major lender saying that it is increasing its interest rates. That will have an impact on RSLs’ ability to borrow. I guarantee that that move was not a response to the Scottish Government’s emergency legislation; it was a response to the UK Government’s mini-budget.
I am looking at the bill’s financial memorandum. My problem is that the Scottish Government estimates the cost to landlords as being somewhere between £3 million and £32 million. That will have a direct effect on Government income, because less income tax will be raised. Could the minister not be a bit tighter on that figure? Does he have a feeling for how much it will affect the income coming in to the Government?
I do not believe that we have yet precisely modelled the revenue that would come to the Government through income tax. However, of course, many of the measures in the bill are subject to extension or potential early expiry if the economic circumstances change. For example, on prescribed limited costs, the percentages—50 per cent and 3 per cent—will be variable throughout the life of the legislation.
Before that intervention, I was talking about the impact on the social rented sector, and I said that it has not been immediately to reduce RSLs’ rental income. However, we want to give the social rented sector confidence that long-term impacts will be taken into account and that we share its priorities in relation to its fundamental purposes.
Social landlords exist for a social purpose. They invest not only in quality, affordable rented housing but in retrofitting, the net zero agenda and a wide range of other services. The Government shares that priority and understands the ways in which the sector is fundamentally different, in that rental income is reinvested for the public good—members have mentioned various other differences. That is why we have invited representatives of the social rented sector and others to participate with us in a short-life task and finish group that will inform how such measures are used in the longer term. The first meetings of that group have been productive and have recognised those circumstances. I genuinely believe that creative thinking is already being brought to bear on how we can go forward in a way that protects tenants without endangering those other priorities. [
.] Presiding Officer, is there a problem?
Thank you, Presiding Officer.
RSLs are not-for-profit bodies. They exist to meet social need, and we share their priority of protecting public investments.
I want to move on to talk briefly about the private rented sector. There have been claims—I am not sure that they are justified—about a direct impact on supply. Over the years, there has been an improvement in the quality of regulation of the private rented sector. At the same time, that sector has continued to expand. I have here a quote from Springfield Properties, which is a build-to-rent business that recognises that the proposed temporary measures are
“designed to support families facing fuel poverty this winter”.
It goes on to say that it continues to believe that
“the delivery of PRS housing offers a viable revenue stream in the longer term”.
I am not sure that I agree with the idea that short-term regulations would fundamentally change the long-term viability of the sector.
Elena Whitham was right to point out that several countries in Europe have more regulation than we have, with long-standing rent control systems; they also have a thriving rented sector, including through private investment. There is an analogy with the scaremongering that was brought in when people first debated a minimum wage; some of those arguments were clearly born out of self-interest and they did not come to pass. In many ways, the arguments around rent controls are similar.
There is a wider question. If we do not do this—if we do not accept responsibility for controlling some of the eye-watering rent increases that some of our constituents have faced just because we believe that that is how the market works—we will leave our constituents in a simply unacceptable situation. It is clear that the cost crisis is felt here and now by people who rent their homes, and we are determined to take action to help people keep a roof over their heads during a crisis that is not of their making.
The bill that we have introduced presents a package that is impactful, practical, radical and robust. Its purpose is to offer increased protection to tenants who are more vulnerable to the cost crisis than others are. By including safeguards that address the specific, defined and limited circumstances that some landlords will face, the bill recognises that the cost crisis can impact them, too, and it also builds a bridge towards our longer-term work on a new deal for tenants.
In conclusion, many of the important points that members have made today have been heard, and I am grateful to the members who made them. I am also grateful for the time that the committee took this morning to consider the bill, and I look forward to the discussions continuing as members debate it over the rest of the week.