Chamber and committees

Local housing allowance rate is determined and well understood. In fact, it is published on the Scottish Government’s website, so I am a little unsure as to why the cabinet secretary says that she does not understand what is meant by local housing allowance rate. It is published, and rent officers provide information on the 30th percentile of local rented accommodation. I am struggling to understand her point.

Has the Scottish Government done any analysis of the incomes of renters and what proportion of those comes from sources other than wages?

I hear what the cabinet secretary has said about other means of income being available to many households, but does she accept that wages are the primary source of income for the vast majority of renters and that, as we know, wage inflation has clearly not kept pace with the CPI?

There are three sets of amendments in this group, and I will take each of them in turn. The first set, which comprises amendment 158 and consequential amendments 148, 149, 159, 160 and 185, would allow the Scottish Government to introduce an emergency national rent control system.

Members of the committee will remember our introducing emergency powers in a great rush during the Covid pandemic. The simple aim of amendment 158 is to ensure that we do not have to rush to reinstate those powers, should the unthinkable happen again and we face a similar public health or other emergency. We would not need to go through the process of an emergency bill because we would already have the powers to act. That does not mean that ministers would have to use the powers; it means that they would have the opportunity to do so if circumstances called for them. It is a simple precautionary measure.

The second set, which comprises amendment 199 and consequential amendments 186 and 196, seeks to reinstate the transitional provisions that offered some protection to tenants ahead of rent control areas coming into force. Those protections expired at the end of March, exposing renters to unacceptable rises in rents, above the protected limit of 12 per cent that those provisions guaranteed. Those measures were meant to act as a bridge to the bill’s controls, and it makes absolutely no sense for them to have lapsed before rent control areas are in place and the bill has achieved royal assent.

I would go as far as to say that knowingly allowing those protections to lapse was reckless, and no impact assessment was undertaken before that happened. Renters on lower incomes—those who can least afford such uncontrolled hikes—have virtually no protections now. The Scottish Government, which supports rent controls, is allowing rents to soar in the two years before its new rent control measures come into force. Landlords can use and are using this period to hike rents before rent control measures begin.

The Scottish Government told this committee:

“If we were to move directly from the emergency measures by switching them off entirely at some point in the future and go back to open market comparisons for rent adjudication, there would be severe and unintended consequences.”—[Official Report, Local Government, Housing and Planning Committee, 28 February 2023; c 7.]

That is exactly what is happening now—we are experiencing “severe and unintended consequences.” We need to act, and that second set of amendments deals with that situation.

My third and final set of amendments, which comprises amendments 424 to 426, would introduce “special rent control areas”. Those areas would work much the same way as rent control areas, but they would allow for rents to be increased by a lower amount than is specified in the central formula, to be frozen or to be cut. Those powers are crucial. Rents have increased by grotesque amounts in some areas—as we have already heard this morning, they have increased by more than 100 per cent in some areas—and the central formula of CPI plus 1 percentage point up to a maximum of 6 per cent will do nothing to address that.

There is a very strong case in Glasgow, Lothian and some other areas that have recently had large rent increases to apply short-term controls that would allow for much tighter limits on rent. If we do not do that, we would essentially be endorsing the unacceptable increases that have taken place in recent years.

I will be happy to discuss with colleagues whether those tighter controls should require different processes for approval, different standards of evidence or other safeguards. I have already limited the lifetime of the proposed special rent control areas to one year. However, I hope that we can agree on the principle that there are some areas in which tighter controls will temporarily be needed. Recognising that principle means that we should do something about it, which is what I am seeking to do with my amendments. I hope that colleagues can support that principle and therefore my amendments.

I move amendment 148.

I acknowledge that the national rent cap does not take into account geographical variation, but that is the point—it is a national system that is designed for a situation in which there are external pressures that are extraordinary.

I appreciate what the cabinet secretary said about the powers being broad and that local authorities will have interim assessment powers within the existing framework, but there might well be instances when we need to act very quickly. I believe that having that power would give some comfort to renters who do not necessarily have the leeway to cope with external shocks—that is why we introduced the emergency provisions a few years ago. The amendments would give ministers the power to do that again, but they do not require them to use that power.

I take issue with what the cabinet secretary said about the protections that expired at the end of March not being intended as a bridging mechanism. The Housing (Scotland) Bill was supposed to be much further along by this point in the parliamentary session and we had expected rent controls to be in place by now, so the protections were bridging mechanisms. The fact that no impact assessment was carried out means that the Scottish Government has no idea what the negative impact of the loss of those protections will be on renters.

Finally, the designation of special rent control areas is a temporary measure that would deal with hyperlocal areas. However, I appreciate what the cabinet secretary has said and giving those powers perhaps goes too far. I wonder whether there is scope for conversation on and an opportunity for us to consider hyperlocal issues in areas that a local authority has already designated as rent control areas. I would appreciate an intervention from the cabinet secretary on that point.

The modelling that we have done, with the support of SPICe, has focused on the impact on renters and their ability to pay in order to have an affordable house—a roof over their heads. As I said last week, the Housing (Scotland) Bill was introduced as part of a collection of policies and strategies designed to provide a new deal for tenants. The purpose of rent controls is to allow tenants to have affordable homes in which to live, not to line the pockets of profiteering landlords.

The cabinet secretary said that the measures were not designed to be transitionary, so why was the committee told that they were, and that having a gap between the measures and RCAs coming into force would be extreme and problematic?

Thank you.

I have a question about amendment 314 and only one request being allowed in a 12-month period. Would that apply once information has been provided? My concern is that, if information is not forthcoming or only partial information is provided, surely the local authority should be able to go back to the landlord and say, “Where’s this missing information? We need more.”

We have not seen rents decrease where more homes have been built. I have lodged further amendments to the bill, which we will consider at a later point, on some of the challenges around mid-market rent and build to rent. We have not seen rents go down when a lot more homes have become available through the kind of building that Meghan Gallacher describes.