Meeting of the Parliament

Meeting date: Wednesday, January 25, 2023

Official Report 1276KB pdf

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Housing

The next item of business is a debate on motion S6M-07614, in the name of Miles Briggs, on delivering the homes that Scotland needs. I ask those members who wish to speak in the debate to press their request-to-speak buttons.

16:12  

Scotland has a critical shortage of housing, as I think the previous debate clearly outlined. Given the amendments to my motion, I do not think that any parties question that assessment of the situation. In fact, Homes for Scotland has calculated that, across all tenures, there has been an accumulated shortfall of more than 110,000 new homes since Scottish National Party ministers came to power in 2007—that is their target for the next decade. That makes the drop in the number of new homes being started that was reported in yesterday’s housing statistics all the more worrying.

Although the increase of 1,806 in completions in the year to the end of June 2022 is welcome, that is more than offset by the drop of 2,765 in the number of new homes started and it will further add to the housing crisis that Scotland already faces. Further, as well as private-led new build starts decreasing by 15 per cent in the year to the end of June 2022, social sector starts fell by 16 per cent—

If Miles Briggs has been meeting with the sector, he will have heard what I have heard, which is that the key issue that it faces is the rate of inflation—interest rates, too, but particularly the rate of inflation. Does Miles Briggs acknowledge that that is the major driver at the moment?

I think that is where the global commodity prices have been impacting. Coming out of the pandemic, issues around steel and concrete have had a huge impact globally, not just in Scotland. The sector tells me that its major concern has been the impact of the Scottish Government’s rent controls. I am sure that that is why the Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights, who is sitting beside the cabinet secretary, finally took action to remove the social rented sector from the rent control legislation. I welcome that, but I wish that he had listened to Conservative concerns on that at the time.

The cabinet secretary has spoken about peaks and troughs in relation to the Government meeting its housing targets, but the concern is that we are currently seeing only troughs. I agree with what Willie Rennie said about delivering the homes that Scotland needs.

There is also a very real concern about the impact of the Scottish Government’s current proposed budget cuts, especially on the housing and local government budgets, which face significant pressures, as we hear from every councillor across Scotland.

I do not know why the Scottish Government has decided to target the cabinet secretary’s portfolios with such major cuts, compared with those of other ministers, but there will be a very real impact on meeting the housing targets of the future, and there will be a direct impact on key, vital council services.

The lack of new housing and affordable housing is a particular concern in rural and island communities. Last week, along with the Social Justice and Social Security Committee, I visited Uist, and the message that came across loud and clear from the islanders whom we met was that it is now critical for more affordable homes to be delivered in rural and island communities, in order to meet the needs of key workers and that, without urgent action, depopulation is rapidly becoming a real issue once again. That is not to mention the devastating impact that the on-going delay in delivering the new ferries, which the islands need, is having on transport connections and on those vulnerable communities.

Scottish Conservatives have continually called for the doubling of the Scottish Government’s rural housing fund, in order to help incentivise construction in remote and rural communities. The Government needs to really listen to that.

With regard to Collette Stevenson’s points about the national planning framework, the reason why I felt that we could not support the framework was that it did not acknowledge the housing crisis in Scotland. The Government needs to get real on that. It did not provide the framework that many wanted to see, with a focus on delivering the new homes that desperately need to be brought forward in all sectors across Scotland.

The situation for first-time buyers is also very concerning. The decision by SNP-Green ministers to scrap help-to-buy schemes has made it harder for many young first-time buyers to consider buying their first home. That is why Scottish Conservatives want to introduce a rent-to-own scheme, which would allow tenants to buy their home and receive a percentage of their rent to put towards a deposit. I hope that ministers will really take the proposal on board, look at the pressures that many households face and take that policy forward as soon as possible.

It is clear that ministers need to act and take into account the changing market—for example, by allowing councils to respond to varying prices across Scotland and raising the national threshold for land and buildings transaction tax.

We need to see a new approach from the Scottish Government. We all agree that we urgently need more social housing to be built. I have met representatives from that sector; there is real anger at how the Scottish Government has treated the sector, and they want to look to a long-term solution to address the lack of affordable housing.

As many members have mentioned, more action on empty homes is needed. For 15 years, the Government has promised to bring empty homes back into use, but we have not seen that progress. I agree with the point that was made in the Labour amendment that

“urgent interventions are required to unlock”

those homes, but those interventions have not come forward from this Government.

It is clear that very real negative impacts are on the horizon for our property market in Scotland. Surveys that were conducted by Scottish Land & Estates, Propertymark and the Scottish Association of Landlords demonstrate that people are now looking at removing their private rented properties from the sector. Seventy per cent of agents report that landlords are deciding not to bring forward rental properties.

Government ministers say that they agree that the private rented sector has a key part to play in ending homelessness and the housing crisis, yet we have seen them attack that sector, and fewer homes are coming forward. That crisis will only build as we head into the autumn.

We have real concerns about what could be the collapse of the private rental market in Scotland, especially here in the capital, where supply is significantly decreasing at the very time that demand for housing is increasing.

Ministers need to start heeding those warnings and act before it is too late.

I move,

That the Parliament believes that building new homes is the best way to address the housing crisis; expresses disappointment that the Scottish Government missed its house building target deadline by a year; is dismayed by the cuts to the housing budget in the Scottish Government’s proposed Budget 2023-24 and that residents in Scotland will be forced to pay higher property taxes than in the rest of the UK; believes that restrictions on rent and evictions reduce investment in housing markets; recognises that Scotland is currently experiencing a housing crisis, and calls on the Scottish Government to prioritise the delivery of new homes, particularly for the social rent sector and in rural and remote areas.

Before I call the cabinet secretary, I remind members to exercise a bit of caution in any references—direct or indirect—to the Cost of Living (Tenant Protection) (Scotland) Act 2022. As members have been advised, a petition for judicial review of that legislation has been lodged with the court, and the case is therefore considered to be active for the purposes of the sub judice rule. I think that members were provided with further information on that point, and I hope that all members will be very careful when referring to the issues.

16:20  

I will start by saying how refreshing it was to hear the tone of Jamie Greene’s closing speech in the previous debate. Would it not be so much more productive if the Tories took that tone in the chamber instead of making constant attacks? They say that it is all our fault; there is no positivity and no solutions are proposed. That is something on which the Tories need to reflect.

Jamie Greene mentioned the problem of empty homes, which is an important issue. We have been taking action on empty homes, which has brought more than 8,259 homes back into use since 2010. However, there is more to be done, without a shadow of a doubt. That is why we have made a commitment to look at compulsory purchase powers and to modernise the process. I wonder whether the Tories will vote for or against those measures when they are introduced. I suspect that, yet again, it will be a case of their saying one thing in the chamber and voting in a completely different way when it comes to introducing measures to resolve the problem.

I welcome measures to modernise the compulsory purchase process. With an awareness that councils do not have a lot of money to complete that process, will the Government introduce plans for compulsory sale orders, so that local authorities can expedite getting empty homes back into use without the capital requirements of a compulsory purchase order?

Mark Griffin will be aware that we are considering the matter of compulsory sale orders as part of the review, but any new powers will have to be compliant with the European convention on human rights—there are issues there that he will be aware of. I am happy to speak to him separately in more detail about that. I am keen to look at using all the levers that we can possibly use.

We have focused very much on the delivery of affordable homes, and we are taking a world-leading approach to tackling homelessness, improving people’s experiences of living in the rented sectors, and increasing our housing stock, albeit that there is more to be done.

Back in 2016, we brought an end to the Tory policy of the right to buy, which saw more than 500,000 social homes move out of the reach of people who would otherwise have been able to access them. Over a decade, our change to that policy secured 15,000 homes that would otherwise have been lost from our housing stock.

This Government is aware that the economic mismanagement of the United Kingdom Government has led to soaring inflation, spiralling energy bills and hardship, which are of deep concern to this Government. We continue to urge the UK Government to use the key levers that it holds.

This Government is providing almost £3 billion in the current financial year, including £1 billion that is only available in Scotland, which will help households who face increased living costs. We are taking concrete actions to help people through the current crisis, and we are taking longer-term action to support people with their housing costs, too.

We have seen raging inflation; damage to the labour supply and trade due to Brexit; surging energy prices; and an illegal war in Ukraine—all of which have had a huge impact on the delivery of affordable housing, as anyone in the sector will tell anyone who wants to listen. It is in that context that we are now working to deliver more affordable homes. That is a very difficult backdrop, without a doubt. However, we remain committed to delivering 110,000 affordable homes by 2032, of which 70 per cent will be for social rent. Work to meet that target will be supported by a total investment package of around £18 billion and will provide up to 15,000 jobs each year while also making an important contribution to the economy. It will be backed by £3.5 billion in this parliamentary term. Therefore, it is not credible for anyone to say that we are not putting in the resources.

On resources, I would be surprised if I had to tell anyone in the chamber that our capital budgets across the whole Scottish Government have been impacted by a 3.4 per cent real-terms cut by the UK Government. Our capital budgets depend on the UK Government’s—it is basic economics. The Barnett formula means that, if there is a real-terms cut to UK capital budgets, our budgets are reduced, so budgets across the whole Scottish Government are reduced.

I set out in my closing speech in the previous debate the measures that we are taking to mitigate that £36.87 million or 4.7 per cent reduction in the published capital spending review figure. They are a mixture of financial transactions—a transfer from the heat in buildings fund and donations from our charitable bond programme—to ensure that we keep the supply of funding coming through. That is what we will continue to do, but, as anyone will tell members, the biggest impact is through inflation.

The Government will continuously review the impact of current inflationary pressures and market conditions on our capital programme, and we will take the measures that we need to take. We have huge ambitions for housing in Scotland, which are set out in “Housing to 2040”, and we are working closely with local authorities, housing providers, landlords and the construction and house building sectors. I am proud that our long-term housing strategy sets out a route map for how the Government intends to deliver the “Housing to 2040” vision and that we will continue to work with others to translate that vision into action and reality.

I move amendment S6M-07614.2, to leave out from “building new” to end and insert:

“everyone should have access to a warm and affordable home that meets their needs; notes that the previous 50,000 affordable homes target was met in March 2022 following delays caused by the COVID-19 pandemic; further notes that global supply issues, rising costs and the impact of Brexit have affected the delivery of homes; acknowledges that £752 million is being made available in 2023-24 as part of more than £3.5 billion in the current parliamentary session towards the delivery of the Scottish Government’s commitment to delivering 110,000 affordable homes by 2032, of which at least 70% will be for social rent and 10% in remote, rural and island communities, and agrees with the importance of giving tenants stability in their housing costs and housing security at a time of an unprecedented rise in the cost of living.”

16:26  

We welcome this afternoon’s second debate. Although there is much crossover with the previous debate, we are absolutely clear that the faltering housing market in Scotland is as much a consequence of Tory economic chaos and mismanagement as it is one of Scottish Government inaction. On that basis, we do not find ourselves in a position to support the Government amendment or the Conservative motion at decision time.

The fact is that it is an uphill struggle for most families to get a home that they can be proud of—one that is warm, safe and affordable—regardless of whether it is in the social sector, in the private sector or owned, and, for many, the choice of tenure is limited. That is because we are not building enough and because too many properties whose primary purpose was to be someone’s home are going unused or are used by wealthy individuals to accrue further wealth.

We share the Conservatives’ disappointment that it took an extra year for the previous target to be met, and we agree that we need to build our way out of the housing crisis. However, yesterday’s statistics confirm that starts are down across all tenures, with dire prospects for the years ahead. Homes for Scotland calculates that we are now 110,000 homes short of where we should be. It is no wonder, then, that there is practically no choice in the market. We have just had a debate about homelessness, but those declines in starts will mean greater shortfalls in the future.

We should also consider the affordable housing pipeline. Approvals in the year to September were down 1,400 while starts were down almost 2,000, and the Scottish Federation of Housing Associations has flagged up its belief that the Government is not on track to meet its targets. Having questioned the Government for months about construction, inflation and the suitability of benchmarks, I am glad that it now accepts that construction inflation has meant a slowdown in some of the delivery projects. That recognition is a start, but what follows from it is surely that a further review of the benchmark system is essential.

The Government has known internally that the pipeline has been drying up. Its risk register for the affordable housing supply programme, which I obtained over the summer, shows that the affordable house building scheme is struggling. Every issue was marked with a risk score higher than its target. Material shortages, underspends, rising tender prices, insufficient capital, and slow approvals and starts are all flashing red on the Government’s risk register.

There is continued discussion about what the budget looks like for the year ahead and whether there will be peaks and troughs in investment, but Shelter is clear that it counts it as a 16 per cent cash cut. The Scottish Parliament information centre says that, if we compare like-for-like budgets, it is a 12 per cent drop in real terms and that capital grant funding is down by 19 per cent. It does not matter where we take our figures from—money is being lost from the building sector this year, so we will have fewer homes for the future.

It is not just about the overall budget. Another issue that is affecting the supply of local affordable housing is the hike in the additional dwelling supplement that was announced in December. Councils will have to pay that, but registered social landlords will not. Although we agree with the increase, we think that the Government should introduce measures to take that burden from local authorities.

In my region, North Lanarkshire Council and Falkirk Council have been liable for average payments of between £3,000 and £5,000 for their purchase of off-the-shelf homes or homes from the market. Those figures will now increase by 50 per cent. I know that the Government consulted on exempting councils. Nine months on, that has to become the reality. The funding that the Government provides for house building is coming back to the Government through the additional dwelling supplement, rather than going towards its primary purpose.

In closing, I want to make it clear that the Tories are absolutely not off the hook in this debate. It seems slightly blinkered of them even to bring their motion to Parliament. We all saw that the Scottish Property Federation’s briefing that was issued last week cites a £700 million loss of investment in the private rented sector, and we do not have short memories.

Mr Griffin, you need to bring your remarks to a close.

That was clearly caused by the Conservatives’ disastrous mini-budget, which wiped billions of pounds off the value of the economy. We must bear that in mind.

I move amendment S6M-07614.1, to leave out from “expresses” to end and insert:

“urges the Scottish Ministers to remove local authorities’ liability for additional dwelling supplement when purchasing second hand and off-the-shelf homes, which risks councils’ ability to increase affordable stock; agrees that the UK Government’s disastrous mini-budget has vastly increased lending costs for owner occupiers, registered social landlords and investors in all housing tenures, exacerbating Scotland’s housing and cost of living crisis; believes that protections for tenants, and proposed changes to the Home Owners’ Support Fund Mortgage to Shared Equity scheme, which would reduce equity requirements and increase price thresholds to reflect true house values, are vital interventions to support people to stay in their homes during a cost of living crisis made worse by the UK Conservative administration; believes that urgent interventions are required to unlock the 67,152 empty and second homes across Scotland and return them to their primary purpose as residential dwellings; is disappointed that the Scottish Government missed its housebuilding target deadline by a year; is dismayed by the cuts to the housing budget in the Scottish Government’s proposed Budget 2023-24; notes with concern further declines in affordable housing approvals and starts in the year to September 2022, and calls on the Scottish Government to urgently prioritise the delivery of new homes, particularly for the social rent sector and in rural and remote areas.”

16:32  

I apologise for not being in the chamber for the conclusion of the previous debate. I got stuck in a very detailed discussion with Murdo Fraser about whisky of all issues.

I do not think that we need any more details, Mr Rennie.

I apologise for that.

I will start off where Mark Griffin finished. I agree with much of what Miles Briggs said in his opening speech, but he cannot ignore the direct impact on people’s mortgages of Liz Truss’s budget. A 10 per cent increase in payments has blown a hole in many people’s finances. For those on a typical budget, that could mean paying an extra £1,800 a year. That is the context in which we are now living. It is right for Miles Briggs to reflect on that. I know that he was embarrassed by the budget, as many Conservatives were, but that is the current context and environment.

Young people in particular face a real challenge in raising enough money to put down a deposit to buy their own home. We have a massive intergenerational problem in housing. Many older people have access to property, but younger people cannot even think about that. I bought my first home when I was 25, but many people now do not see themselves ever getting their own home. Again, that is the context.

The cabinet secretary is right to identify the huge challenges relating to inflation and cost increases. However, other issues include a lack of skills in the sector and access to land—some house builders are finding it very difficult to access land. That ties into the debate on NPF4 that we had before Christmas. There is an emphasis on trying to utilise brownfield sites and properties above shops, but it is not cheap to do that. It is costly—otherwise they would have been developed by now—so the Government needs to look at incentives to make that happen. The more we put into that, the more challenging it will be to meet our other overall targets, so we need to get the balance right between brownfield sites and greenfield sites. There is great pressure to build more houses, so the Government needs to provide the right incentives.

However, I am concerned about the wider policy environment. We are in a state of massive flux. We have had a range of pieces of legislation in recent years with regard to short-term lets—the Private Housing (Tenancies) (Scotland) Act 2016, the coronavirus acts, the emergency rent cap before Christmas. We have supported all those measures and, although we did not support the short-term let licensing, we supported the control areas.

On top of that, landlords have seen the UK Government’s landlord tax relief changes have a direct impact on their investments. We are in a state of flux and we have many reports of landlords evacuating the sector.

Before we move to the next stage of proposed changes—perhaps around rent controls—I would like us to see the evidence of the impact of the current legislation on the housing sector. If young people cannot get into a property of their own, we need to ensure that there is a healthy private rented sector. However, all the jungle drums are saying that it is not healthy just now and that good landlords, who are providing good homes for people, are finding it difficult to sustain their private properties and are leaving the sector.

We might be at a tipping point, and I want to ensure that the Government is listening, watching and reading all the evidence before we go further with any proposed rent controls. I have heard and seen the evidence from other countries about the impact that rent controls can have on investment in—and disinvestment from—the private rented sector. I want to ensure that we have the evidence before we take the next step.

My final plea is for the Government to put more emphasis on the Communities Housing Trust and the rural housing burden opportunity, which would be particularly beneficial to areas such as the east neuk of Fife, where working people find it very hard to have their own home close to their place of work. Although that might not be the whole answer, it might be part of it, so I hope that the Government can put greater emphasis on that in the future.

We move to the open debate.

16:37  

We do not debate housing often enough in this place—I do not know why; it is perhaps not seen as exciting enough—so to get two debates in one day is really good. A debate on housing targets will probably not grab any headlines—even very worthy things such as Alex Rowley’s attempt to have all new homes built to Passivhaus standards do not really cut through. However, housing affects us all. We all need somewhere to live and there are wildly varying standards of accommodation in this country.

Solve the cold-homes problem with top-notch insulation and you help to solve the fuel poverty crisis. If our old folk can live in warm homes that cost very little to heat, they will have a better life—we all would. Solve the tenement maintenance problem—as some of us in Parliament are trying to do—and you solve the issue of people living in poor conditions in many of our towns and cities.

Housing matters to our mental and physical health and wellbeing, so delivering the homes that we need is one of the most important things that we can do. However, when you have 47,000 homeless people and 21,000 households in temporary accommodation but 67,000 unoccupied properties in Scotland, something is wrong. When that number of households in temporary accommodation has gone up since Nicola Sturgeon came to power, you have to question her priorities.

I have to give the SNP some praise. It is consistent: it has repeatedly missed its house-building targets. It told us that 50,000 affordable homes would be built in the previous session, which were built, but a year late; it has missed its target to build homes in the social rented sector; and there was scant reference to housing targets in the recent national planning framework 4.

Homes for Scotland has said that we need 100,000 new homes after years of undersupply. It always says that we need more—it is its business to do that—but I do not hear anyone contesting the figures. We know this—we have known it for years—but we do not do anything about it.

We need a homes delivery agency tasked with the job of helping and cajoling councils to hit targets, with the right homes in the right places.

Right now, we are just tinkering around the edges. Not only that, we have a Government that actively damages the housing sector. Patrick Harvie’s rent controls will lead to fewer homes being available for rent, less investment in those that remain and ultimately higher rents. You could not make it up. I just wish that I had, but it is true. We will see students struggling to find somewhere to live—we already are.

We should be encouraging firms—yes, private firms—to build more homes for rent, not putting barriers in their way. We should be dealing with the problem of empty homes through compulsory sales orders. That used to be SNP policy, but it has obviously ended up in that mountainous too-difficult pile.

I go back to where I started: housing matters. It affects us all, and it is too important to let ideologues loose on it. Sometime soon, reality is going to have to kick in. I support the motion in the name of Miles Briggs.

16:40  

I was surprised to see the Conservatives lodging the motion for this debate when it is their Government in Westminster that is directly impacting the Scottish Government’s ability to build new homes and tackle inequality. It is the capital spending decisions of the Tory UK Government that have led to such difficult choices in this year’s draft budget. The Scottish Government saw a 3.4 per cent real-terms reduction in its capital allocation for housing for 2023-24 as a result of the decisions that were taken in Westminster. Frustratingly, the falling capital grant allocation that Scotland has received, along with relentless inflation and cost pressures, has reduced the buying power of the Scottish Government’s ambitious housing investment.

In anticipation of difficult financial circumstances, a reduction has already been identified in the capital spending review. Without the full fiscal levers of an independent state, difficult decisions had to be made despite the challenge of UK Government austerity, Scotland’s five-year £3.5 billion commitment in the affordable housing supply programme remains. The Scottish Government’s £752 million investment for 2023-24 represents progress towards that £3.5 billion pledge. Additionally—and in the most challenging budget settlement since devolution—the Scottish Government is providing more than £13.2 billion to support councils and communities to meet their housing needs. Inflationary pressures and market conditions will continue to affect the capital investment programme, but the Scottish Government has been clear that that will be monitored.

A different approach to that of the Tory UK Government is possible. Unlike Westminster, the SNP-led Scottish Government is using all the levers at its disposal to maximise housing investment to the benefit of people and the economy. Our ministers have already set out how they are targeting public spending as effectively as possible. As affordable housing remains a key priority, the Scottish Government plans to mitigate the near £37 million reduction in its housing budget from Westminster with a £15 million in-year transfer from the heat and buildings strategy budget to help to fund zero-emissions heating systems with charitable bond donations, which will be directed towards investment in social rented homes, and with further financial transactions.

The Tory motion complains that this Government has not met its house-building targets. However, the Scottish Government remains fully committed to delivering 110,000 affordable homes by 2032. More than 113,000 affordable homes have been delivered since 2007 by the SNP in government.

Since 2007, the annual average supply of affordable housing per head of population in Scotland has been 13.9 homes per 10,000 population. That is the highest level in the UK. It is higher than in England, which has delivered just 9.7 homes per 10,000 population; higher than in Wales, which has delivered eight homes per 10,000 population; and higher than in Northern Ireland, which has delivered 13 homes per 10,000 population.

Will the member take an intervention?

The member is in her last 30 seconds.

In relation to the new target of 110,000, 4,927 affordable homes have been delivered. Indeed, this SNP Scottish Government has a track record to be proud of. The previous 50,000 affordable homes target was met in March 2022—a year late, but we have had a pandemic. Those homes have been reducing inequality by providing more warm, safe, high-quality places to live, including in my Aberdeen Donside constituency.

In closing, Presiding Officer—

Ms Dunbar, you will need to close.

—the SNP Scottish Government is acting to build homes, tackle inequality and better the lives of the people of Scotland.

We have no time in hand.

16:45  

Thank you, Presiding Officer, for the opportunity to speak on this important issue. My casework is inundated with constituents experiencing housing issues, whether caused by them being on lists waiting for permanent family homes to be offered, in unsuitable temporary accommodation, or suffering the effect of mould and damp in social housing.

I am very concerned that the allocation for housing in the Scottish Government’s proposed 2023-24 budget will only make the housing crisis worse. We need to address the problems head on. If funding is not allocated to the housing budget for the building of new homes, the Scottish Government will be hard pushed to reach its own affordable housing targets. Further cuts to local government also mean that councils cannot attempt to tackle this housing crisis. The creation of new homes is crucial to solving the catastrophe that is currently unfolding in our housing sector.

The reduction in housing investment can be attributed directly to the UK Government’s disastrous mini-budget, and the steep rise in interest rates that came as a result. Scottish Labour supports a rent freeze and eviction ban to help tenants during the cost of living crisis. We recognise that that is not a long-term solution to the housing crisis, but ending restrictions on rent and evictions would only exacerbate the crisis, with an estimated 14,250 households experiencing homelessness in 2021.

Shockingly, an estimated 13,000 children might not sleep in their own homes tonight. New housing must be built to try and tackle this evolving problem, and the Scottish Government must increase funding to local authorities in its 2023-24 budget to deliver vital homelessness services.

City of Edinburgh Council alone is facing a £65 million bill to tackle homelessness. Local authorities across Scotland will also be buckling under the weight of the overflowing housing sector. New and existing homes must be brought up to standard to ensure that they are energy efficient and that tenants are protected from mould and damp. I recently raised that issue in a motion before Parliament, and I am very worried that, without action, housing across Scotland will be putting our constituents in danger.

Damp housing disproportionately affects those living in poverty, and the cost of living crisis has forced people to avoid heating their homes. That has simply made the problem worse. New homes need to be provided, and we need to ensure that they are energy efficient, insulated and, most importantly, affordable for those who need them most. That must be a priority for the Scottish Government—otherwise, the housing crisis cannot be resolved.

16:49  

My colleague Graham Simpson rightly said that housing policy is extremely important—it certainly is. I will concentrate on the economic and geographical mobility aspect of the policy, which is absolutely critical when we are looking at the future. That is because there is extensive evidence in several quarters that the SNP’s current housing policy is hindering the mobility that we so desperately need.

Indeed, the Deputy First Minister has, rightly, said on several occasions in the chamber that the biggest challenge for the Scottish budget in future years is Scotland’s demographic profile, especially the diminishing size of the working population in relation to the total population, which will have knock-on effects on productivity and tax take. Therefore, it is surely important that the policy decisions that are taken on housing do everything possible to address those issues and the likely behavioural changes among the public.

I will give an example, which involves an issue that has been exercising the Finance and Public Administration Committee for some weeks. The Scottish Government has made it very clear that there are two intentions behind the proposal to increase the tax rate on the additional dwelling supplement from 4 per cent to 6 per cent—namely, to raise revenue and to protect first-time buyers. That is all well and good in principle but, as the Scottish Fiscal Commission, landlord associations and local authorities have all said, the potential exists for significant behavioural change as a result of the policy.

I will explain why. In many parts of Scotland, the only people who are buying and modernising properties are private landlords. Those properties include empty houses that are being brought back into use. That is extremely important activity, especially in our rural communities, which are already at risk of depopulation and where we very much need farm and rural sector workers. There is also a need to promote the tourism market, which is a market that Scotland can ill afford to undermine. Landlord associations complain that 44 per cent of their members are already intending to reduce their portfolios. That is very serious indeed for Scotland.

The issue is not simply one that affects some landlords’ income. From a general economic perspective, it matters in relation to ensuring that there is better housing stock and encouraging a more mobile workforce, which Scotland so desperately needs in order to improve productivity and geographical mobility. If Scotland is to be truly open for business, housing policy must play a critical role.

My colleagues have spoken about the recent rent freeze and have cited the reaction of several stakeholders, which was not surprising, given the Scottish Government’s inability to justify the different approaches to the rent cap in the social housing and private rented sectors. Critics make the case about the inflexibility of the policy, whereby the rent control applies irrespective of the financial positions of the tenant and the landlord, which means that a relatively well-off tenant who rents in the private sector is provided with financial protection that is not afforded to someone who is less well off in the social sector. That does not make sense.

John Blackwood of the Scottish Association of Landlords has rightly made the point that the rent freeze and eviction policy means that it is unsurprising that many landlords are selling loss-making properties, which is further reducing the housing supply at a time when demand is increasing. He has pointed out that while local authorities and housing associations can put up rents in order to make repairs and improvements, the Government has failed to acknowledge that private landlords face exactly the same challenges.

A few months ago, we had the ridiculous situation in which the University of Glasgow told students that they would be best not to enrol for their courses until they had found accommodation, because of the difficulty of obtaining suitable rented property. That is hardly an acceptable situation.

I do not doubt that housing policy is complex, particularly when it comes to matching supply with demand, but neither do I doubt that the current SNP interferences in market forces are making things a whole lot worse. They are forcing detrimental behaviour change, with the result that stakeholders who have been relied on to help the housing market are now being forced out. That is not good for Scotland or for the ambitions to achieve long-term growth.

16:53  

It is a basic human right to have a place to call home. It provides shelter, comfort, a sanctuary and identity. You have your own address: “This is where I live.” Now, however, there are increased pressures on people keeping what home they have by meeting the mortgage payment when interest rates, along with energy and food bills, are soaring.

It is true that we need more social affordable homes, but a number of factors are impacting on the cost of constructing houses, one of which is inflation. The level of inflation—10 per cent—stems directly from the economic failures of the UK Government. That has reduced the actual value of the Scottish Government’s budget, which was set when inflation was at 3 per cent, by some £1.4 billion. That means that, as the cabinet secretary said, the housing budget buys even less in the market.

Another factor is Brexit. After the nigh stagnation of construction in the two years of Covid, demand for construction materials is extremely high, but there is a supply chain issue. One reason for the shortage of construction materials is the fact that lorry drivers are in short supply, which means that it has become more expensive to deliver construction materials to different parts of the UK, and it is therefore more expensive to build. A large number of lorry drivers in the UK were from other EU countries, and many of them cannot come back here.

According to the Construction Leadership Council, 60 per cent of imported materials used in construction are from the European Union. The supply of timber has been particularly affected by Brexit, as 80 to 90 per cent of softwood is imported from European countries. Scarcity adds to construction costs.

Another factor is the skills shortage. It is estimated that close to a million construction workers are set to retire in the next 10 years, which will also significantly impact the industry. Before Brexit, about 40 per cent of all construction workers in the UK came from other EU countries. Now, such workers are unlikely to get visas to work here, as the UK has introduced a points-based immigration system. The impact of the skills shortage in the UK is that employers will have to increase wages, as competition will be stiff among construction companies, and that will put up construction costs.

Then there is VAT. I quote Rishi Sunak, for the first and possibly last time:

“Green belt land is extremely precious in the UK. We’ve seen too many examples of local councils circumventing the views of residents by taking land out of the green belt for development, but I will put a stop to it.”

Yet VAT for construction on brownfield sites remains at 17.5 or 20 per cent, depending on the circumstances, whereas it is zero per cent on greenfield sites. Perhaps Mr Sunak’s attention is occupied on other taxing matters because nothing has happened on VAT equity to date.

All of those—inflation, Brexit and VAT—add to the costs of construction of homes, especially in the social rented sector, where councils are already under pressure because inflation is attacking their budgets on all fronts. None of that is in the control of the Scottish Government. It is all reserved, so let us have some refreshing honesty from the Tory benches, starting perhaps with agreeing that VAT for construction on brownfield sites should be levied at zero per cent.

16:57  

The need for affordable energy-efficient homes continues to be a central topic in the Highlands and Islands, so I welcome this opportunity to highlight the progress that is being made.

Across Scotland, people struggle to find a home where they want to live and often face unaffordable rents and inadequate accommodation. That is why the Bute house agreement commits the Scottish Government to building, as we have heard, 110,000 further homes by 2032, with 11,000 in rural areas.

However, there is no point trying to fill the bath with the plug out. In 2016, Scotland was right to end the right to buy, which had led to the loss of 500,000 social homes—many of which are now being let out by private landlords, at two or three times the previous rent. The Tories would have us continue with the right to buy. In rural areas especially, we lose homes to the holiday and second homes market. The Scottish Government has been right to regulate and introduce stricter planning rules on short-term lets—again, opposed by the Tories. It is right to discuss with the Convention of Scottish Local Authorities the reforms to council tax on second and empty homes, and to make changes to the additional dwelling supplement, both of which have been—you guessed it—opposed by the Tories.

There are a range of practical challenges to the delivery of rural homes, including the lack of skilled tradespeople, a shortage of planning staff and the rising cost of materials. Last week, I visited Merchant house in Inverness, which is an example of what can be done to repurpose and retrofit older buildings to make them energy efficient and sustainable for the future. The renovation, which was supported by Scottish Government funding, has created high-quality affordable homes. The approach that was taken—making the most of the embodied energy in our existing housing stock—would be helped immensely if the Conservative UK Government revised its position on VAT in relation to retrofitting buildings.

We need to consider where well-placed affordable homes could create an opening for young people and families to stay or settle in our rural communities. To that end, I am working to ensure that there is support from the Scottish Government for rural housing enablers such as the Communities Housing Trust, which helps rural communities to build the housing that they desperately need. The trust is currently working on 600 projects across approximately 150 communities, predominantly in rural Scotland. However, a lack of certainty about funding for the Communities Housing Trust’s early-stage work to build confidence and capacity in communities—and for the work of other rural housing enablers—is hampering project development and putting much-needed new rural homes at risk.

Enabling our housing ambitions requires resources. Over this parliamentary session, we will deliver a mechanism for capturing, for public benefit, a share of the increase in land value that occurs when a development is supported through the planning system. It will take time for us to see the benefit of such actions, but all of them will increase the number of homes of the right type, in the right place, while making best use of the homes that we have.

It is vital that homes are affordable. That is why the Bute house agreement commits us to rent controls and it is why we consulted on that in the new deal—far ahead of anywhere else in the UK. In the short term, we have taken emergency action to limit rent rises during the cost of living crisis—again, far ahead of anywhere in the UK.

I challenge the assertion that regulation means declining supply and reduced investment. Neither is true in Germany, which has the largest rented sector in Europe but also one of the most regulated.

What Scotland’s housing sector needs is long-term solutions and a culture change away from housing being seen as an investment to its being seen as a means of creating homes for people.

17:01  

It is a pleasure to speak in this afternoon’s debate. Four minutes is a short time in which to speak about an incredibly important subject. I was a councillor for 15 years—many other members have been councillors—and housing was the biggest issue that I had to deal with, whether the issue was new homes, homelessness or repairs.

The council housing sell-offs of the Thatcher era proved to be a disaster for Scottish social rented sector stock. East Lothian lost 8,000 houses—8,000—and has been in recovery since then. The Scottish Government was right to act on the right to buy in 2016.

Despite the challenge of the UK Government’s austerity policy, Scotland’s five-year £3.5 billion commitment on the affordable housing programme remains. This has been said, but I will repeat it: the Scottish Government is fully committed to delivering 110,000 affordable houses by 2032. As we heard, 70 per cent of those houses will be available for social rent and 10 per cent will be in rural and island communities.

The previous target of 50,000 affordable homes was met in March 2022, having been delayed due to Covid. It provided warm, safe, high-quality places in which to live.

The cabinet secretary mentioned the 3.4 per cent real-terms reduction in its capital allocation for housing between 2022-23 and 2023-24. Members should be in no doubt that that is the result of decisions that have been taken in Westminster after the disastrous Truss-Kwarteng economic experiment. I have just seen the figures: UK Government borrowing is at an all-time high, with national debt now at £2.5 trillion.

There will always be peaks and troughs in investment towards our goal. The Scottish Government has said that investment of £752 million for 2023 represents progress towards the £3.5 billion pledge.

We have heard that the market is slowing down. I spoke to Homes for Scotland last week, and I have spoken to other house builders. The biggest reason why the market is slowing down is interest rate rises due to Tory Government incompetence. People are not investing, because of the impact of interest rate rises.

Scotland has limited capital borrowing powers compared with small, independent countries that are similar to us in size. My colleagues on the Local Government, Housing and Planning Committee and the Social Justice and Social Security Committee know that I would like Scotland to be given more extensive borrowing powers in this area. That could be done within the current devolved set-up and the matter is being discussed in the context of the on-going fiscal framework discussions between the Scottish and UK Governments. I asked the cabinet secretary about that last week. However, Labour and Tory colleagues on those committees will not support the call for those additional borrowing powers. I urge the UK Government to be as flexible as it can be in that regard. Investment in housing will bolster economic growth and provide more jobs.

Another fall-out of the Truss economic disaster is high inflation rates. The UK has the highest rate after Italy among the G7 countries and one of the highest rates among the G20 countries. We have heard about inflationary pressures feeding through to construction costs. Inflation is at 10.5 per cent, but the Homes for Scotland briefing that we received today mentioned that the latest Scottish social housing tender price index puts inflation in construction costs at 22 per cent, not 10.5 per cent.

The Scottish Government remains fully committed to delivering 110,000 affordable homes by 2032, despite rampant inflation. Christine Grahame talked about the impact of Brexit on supply issues, and Mark Carney, former governor of the Bank of England, stated today that, due to Brexit,

“the UK is in the most difficult position of all the major world economies.”

That is a direct quote.

Over the 15 years between 2007-08 and 2021-22, the annual average supply of affordable housing per head of population in Scotland was 13.9 homes per 10,000 of population. I will not repeat Jackie Dunbar’s point on that.

I am a member of the Local Government, Housing and Planning Committee, and we have, like the wider Parliament, been discussing NPF4 and how it would support home building. We will monitor the target of 110,000 affordable homes and will look at the housing need and demand assessment process, the minimum all-tenure housing land requirement, empty homes and other funding models.

On planning, I know that Tom Arthur is engaging with the Royal Town Planning Institute to deliver the 700 planners that are required. The Scottish Government is delivering in extremely difficult circumstances and is working with partners such as Homes for Scotland and RTPI to build as many houses as it can across all tenures.

We move to the winding-up speeches.

17:06  

As I stated earlier, the causes of the lack of housing and homelessness crises have to be borne by both Governments. The disastrous mini-budget will have long-lasting effects on Scotland’s housing market in the social and private sectors and beyond, which is unforgivable. That failed economic experiment will be made worse by continued Government inaction here.

A couple of weeks ago in the debate on NPF4, the Scottish Government again dismissed concerns that tens of thousands of households are actively excluded from the all-tenure housing land calculations on the number of houses that need to be built, and in the autumn, it voted down Labour proposals to help those struggling with mortgages with a revamped scheme with lower equity requirements and an increased threshold that reflects current prices.

I am frustrated that neither the Conservative motion nor the Government amendment offers a direction of travel. They offer no policy proposals that could be implemented and would support change.

We have had contributions from back-bench members. My regional colleague Graham Simpson highlighted compulsory sales orders and my Labour colleague Foysol Choudhury suggested a course of action on dampness. Christine Grahame and Ariane Burgess talked about the reform to VAT that should be introduced by the UK Government. Paul McLennan talked about changes that the Local Government, Housing and Planning Committee, of which we are both members, seeks on NPF4. However, there does not seem to be a direction of travel from the Conservatives or the Government to drive forward policy change.

That is why we see a clear and urgent need for a dedicated housing minister. This is nowhere near a criticism or a motion of no confidence, but the minister has parliamentary responsibilities, in the words of Robert Burns, “As lang’s my arm”. The cabinet secretary has an in-tray that includes local government and the devolution of a range of social security powers, and has no doubt had her time taken up by the Gender Recognition Reform (Scotland) Bill. It is clear that there is a desire in the housing sector, among builders and the third sector, for a more focused Government housing policy, and they would like a dedicated housing minister to lead that.

I spoke in the previous debate about how grant guidance and rules require open-market acquisitions and therefore vacant possessions, which means that sellers are required to make tenants homeless. In the context of the debate, that also means that purchases with a tenant in situ are all but ruled out by the supply programme. Councils and registered social landlords are limited to properties where a tenant may have been made homeless or threatened with homelessness. I would like the Government to urgently consider that area to see whether changes could be made to protect tenants from homelessness while allowing social sector acquisitions. The cabinet secretary made an attempt to intervene on me during a previous debate on that. I am happy to take an intervention on social sector acquisitions from the private sector with a tenant in situ, if the Government wants to make any announcements.

I will not make any announcements, but I will update the member because he raises an important point. I have raised the issue with COSLA, and I hope to make progress on it.

There is a range of issues that I hope we can get our teeth into during a further housing debate—one that forms the start of a substantive discussion and debate on housing, rather than Labour making proposals that are either voted down or repackaged a couple of months later by the Government.

I thank members for their consideration and I ask them to support the amendment in my name.

17:10  

I am not sure that I can quite express my relief at being told by Mark Griffin that he has not lodged a motion of no confidence.

Given the importance that we all attach to housing policy, I hope that members will stay focused on the policy that the Government is pursuing rather than on whose name is on which door, because I think that there is more common ground between us than is sometimes recognised. The importance of housing policy has been recognised by members across the spectrum, and I believe that its importance is written right through the “Housing to 2040” strategy—the long-term vision for housing in Scotland—as well as in the housing elements of the programme for government and the Bute house agreement, which build on that long-term vision.

I will not have time to address all the issues that have been raised today, but supply is, of course, critical—not only the extent of supply, but the nature of supply. Several members have raised issues such as rurality. The existing commitment to deliver 110,000 affordable homes by 2032 includes at least 10 per cent of those being for remote, rural and island communities, including through our demand-led rural housing fund as well as the remote, rural and island housing action plan, which will bolster that work. Like Ariane Burgess, I want to recognise the importance of community housing bodies in delivering that work.

The nature of supply is also about accessibility and the work that we are doing to streamline the adaptation system, as well as reviewing housing for varying needs, which will lead to changes to building standards.

The minister mentioned supply. Does he believe that there will be more or fewer private rented properties in Scotland this autumn?

I was about to talk about the extent of supply after initially talking about the nature of it.

The extent of supply is critical. That issue has been raised by a number of members, and it is worth recognising something about the track record in that area. The 2,500-plus affordable homes that were completed in the latest quarter to September 2022 brings to 9,449 the total number of homes completed in the 12 months prior to that. That is an increase of only 2 per cent on the previous year, but against the backdrop of extraordinary inflation pressures—which we all recognise—as well as the lack of comparable action that we have seen from the UK Government, I think that any increase during the past year is significant.

However, I am not for a moment going to wish away or pretend that we do not face continual, on-going challenges—nor would the cabinet secretary. Some members do not like it when Scottish ministers compare our track record to that of the UK Government, but let us just recognise that, in the four years leading up to 2021-22, Scotland saw not only a marginal improvement on what was happening in England but 59 per cent more affordable homes and more than nine times as many social rented homes delivered per head of population than were delivered in England. Scotland has a strong track record, but we also face challenges as we continue to deliver on that track record.

Members have debated the budget and have different interpretations of it. The cabinet secretary has laid out very clearly how we will continue to strain every sinew to fund the long-term commitment of £3.5 billion being made available for the affordable housing programme during this parliamentary session. I would take criticisms from Conservative members a little bit more seriously if even one Conservative member had argued that the UK Government should inflation-proof the Scottish Government’s block grant so that we are protected from the harm that has been done by the ideological experiment that was the mini-budget from the Truss-Kwarteng temporary Government. During the debate, I have been accused—I think by Mr Simpson—of being an ideologue. The most ideological actions that we have seen that have impacted on our ability to deliver affordable housing have come from the UK Government, not from this one.

I will finish by saying that this is about more than just supply. There are those ideologues who think that the free market will deliver everything. I do not believe that a deregulated free market will deliver housing as a human right for people; I think that we need the action of Government.

I know that I am limited in what I can say about recent legislation, and I regret that I cannot respond directly to the points that were made by some members who chose not to respect those limits, which we were warned about at the start of the debate. However, we are clear on the need to protect people from high rents and to ensure that people have security of tenure.

What we are seeing in Scotland—

Please conclude, minister.

What we are seeing in Scotland is a continued commitment to ensuring that the housing system meets everybody’s needs—our human right to adequate housing and security of tenure as well as affordability—

You must conclude, minister.

—and that is what we will continue to do.

I call Murdo Fraser to wind up the debate.

17:16  

I remind people of my entry in the register of members’ interests: I own a share in two properties that are let on the private rental market.

This afternoon, we have had two helpful debates that have exposed the dismal track record of this Government on housing. Let us look at the facts. Homelessness is on the increase. The number of children in temporary accommodation has doubled in the past eight years. Today, 100,000 children are on social housing waiting lists. At least 24,000 people with disabilities are on waiting lists. There has been a real-terms cut of £215 million in the housing budget. There has been a failure to meet the affordable homes target on time. And there is now a housing gap of 110,000 new homes, according to Homes for Scotland, as Miles Briggs reminded us.

The only excuse that we hear from the Government is that it is all down to inflation—[Interruption.] It seems to be completely ignoring the fact that inflation in the eurozone is pretty much equivalent to what we have in the UK. Indeed, back in November, inflation in the eurozone was higher than it was in the UK. How that could be down to Liz Truss is beyond me, but maybe Mr Harvie can explain.

I am pleased that Mr Fraser is such a fan of the eurozone and of our European colleagues such as Germany, with a decades-long system of rent controls and a stronger and larger rented sector than we have in this country. Is that not evidence enough that we can do a great deal better than the deregulated free market approach that he advocates?

I notice that Mr Harvie could not respond to the inflation point. On Germany, I would say to him gently that he should take a trip to Berlin and see what rent controls have done to destroy availability in the private rented sector there.

On the inflation point, even if there is an issue with inflation in the current year, that does not excuse the past 14 years of failure from this Government when it has been in charge of housing in Scotland. We believe that housing should be a priority for this Government, but the sad thing is that the interventions that it is introducing are making matters worse.

Will the member take an intervention?

Yes, I will, if the minister is brief.

Can I ask how Murdo Fraser can describe the delivery of 115,550 affordable homes since 2007 as failure? Also, does he agree with the Daily Express that first-time buyers get the “biggest leg-up” in the Scottish market? Are those not things that he should be praising rather than criticising?

The minister has not been listening to all the statistics in the debates about the rise in homelessness, the rise in the number of people on social housing waiting lists and the 110,000 homes gap that has been identified by Homes for Scotland. She needs to listen to what is actually happening out there.

We heard about the private rented sector from Graham Simpson and Liz Smith. It is important for social mobility. Not everybody can afford or wants to buy a house, and not everybody can get access to the social rented sector, so we need a vibrant private rented sector. However, the reality is that the choices made by this Government are delivering a rapid reduction in supply. That is a direct consequence of the minister’s choices. It is interesting that Patrick Harvie did not respond to Miles Briggs’s intervention about the decline in supply in the private rented sector.

We hear that, since 2016, there has been a 29 per cent fall in the number of properties in the private rented sector, that £700 million of residential investment has been paused and that landlords are selling up, as every letting agent will tell you. In the city that Mr Harvie represents—Glasgow—that is having a real-life impact. In September, the university told students to give up their courses because they could not get accommodation. That is shameful, Mr Harvie.

Will the member take an intervention?

I am sorry, but I do not have time to take another intervention.

We have a minister who does not understand the sector. If he engaged with it, he would realise that his interventions are causing a greater problem. The international evidence tells us that rent controls, whether they have been introduced in Dublin, Berlin or Sweden, have caused a mismatch between supply and demand and have led to long waiting lists, a reduction in social mobility and illegal subletting. I say to Mr Harvie that that is what happens if a Government brings in rent controls. It is a huge error.

Let us look at the owner-occupied sector. We have a problem that Willie Rennie identified—and I forgive him for trying to blame me for his tardy rearrival at the previous debate. Mr Rennie and I—I think that we are of a similar vintage—bought our first homes in our 20s; now, the average age of a first-time buyer in Scotland is 37. Properties are increasingly unaffordable. We need more homes because we have a growing population. More people are living on their own, and there has been a population shift from west to east in Scotland. Places such as the Lothians, Fife, Aberdeenshire and Tayside need more properties, but we are not building enough homes.

We need to look at the excessive delays in securing planning permission. Three weeks ago, during the debate on national planning framework 4, Fergus Ewing—who, sadly, is not in the chamber—made an excellent speech about relaxing planning rules in order to allow farmers and estates more opportunities to build houses, which could provide economic benefits and drive the economy forward. That is the sort of intervention that we should be listening to.

On this side of the chamber, we have solutions: reform of the planning system; relaxing rules to allow the redevelopment of commercial properties into residential ones; the right-to-buy scheme, which Miles Briggs talked about; the reform of LBTT; and action to bring empty homes into use. Those are things that the Scottish Government should be doing instead of continuing its dismal record on house building.

We have a crisis in housing: too much demand is chasing too little supply. The answer is to increase the supply in the owner-occupied sector, the private rented sector and the social rented sector. The Government’s policy choices are going in the wrong direction and they are making the problem worse. That is why we need change, and we need to support the motion in the name of Miles Briggs.