Chamber and committees

I know that Mercedes Villalba well understands that the exceptions were necessary to demonstrate that the protection against evictions could be presented as a defensible and proportionate measure that the Parliament was capable of passing. I point out that the exceptions do not include the simple desire to make a profit: landlords cannot apply for evictions by using that as an exception to the rule at the moment.

We must work towards a housing system that is fair and equitable and that meets people’s human right to adequate housing. On the need to achieve that, I know that Mercedes Villalba and I have more in common than separates us. I hope that we will continue to work together with Labour colleagues, as we did during the passage of the emergency legislation, to achieve that.

I thank Graeme Dey for raising that issue, which he has done previously. The Government’s wider support to people in its cost of living response goes far beyond the measures that were included in the Cost of Living (Tenant Protection) (Scotland) Act 2022. I encourage him—I am sure that he is already doing this—to refer any of his constituents who have concerns about it to the Government’s wider cost of living website to identify forms of support that they might be able to access.

Pitch fees are not private residential tenancies, so it would not have been possible or appropriate to include them in the 2022 act. However, we accept the argument that there needs to be a review of that inflation measure, and we will consult on that very soon.

I am grateful to Ariane Burgess for that question. It is clear that Scotland is the only part of the UK that has taken these necessary measures. In fact, even when challenged by Plaid Cymru, the Welsh Government decided not to take bold action to protect tenants in this way.

The longer-term rented sector reforms that Ariane Burgess refers to are extremely important to me, and we are already working hard to develop proposals. We need to ensure that there is a bridge between the emergency legislation and the longer-term work. The changes to the rent adjudication methodology that the emergency act allows us to take forward in future will achieve that. If we simply return from the rent cap to open-market considerations, that could create an extremely damaging cliff edge. The adjustments to the rent adjudication methodology will provide the way forward to the longer-term work.

I am pleased to be able to make a statement to Parliament today to accompany publication of the first of the Scottish Government’s three-monthly reports on the Cost of Living (Tenant Protection) (Scotland) Act 2022, covering the period 28 October to 31 December 2022.

The Parliament will recall that we took emergency legislative action in October last year to provide critical, time-limited protection for people who rent their homes. People renting their homes have, on average, lower household incomes and higher levels of poverty and are more vulnerable to economic shocks—63 per cent of social rented households and 40 per cent of private rented households do not have enough savings to cover even a month of income at the poverty line, compared with 24 per cent of households that bought with a mortgage and 9 per cent of households that own their home outright.

With that context in mind, the 2022 act has three key aims: to protect tenants by stabilising their housing costs through the rent freeze; to reduce the impact of evictions and homelessness through a moratorium on evictions; and to avoid tenants being evicted from the rented sector by a landlord wanting to raise rents between tenancies during the temporary measures and to reduce the number of unlawful evictions.

The provisions are in place until 31 March, but the Scottish ministers can, with the approval of the Parliament, extend them for two further six-month periods, should circumstances and evidence show that to be necessary.

From our constituents across the country, we all continue to hear about the unprecedented challenges that are being faced by people across Scotland due to the on-going cost of living crisis. The unprecedented economic position has not yet changed fundamentally, and I know that many households that are on low or modest incomes continue to struggle. People face increased costs across the board, but the biggest impact is felt by people who are on the lowest incomes. The Office for National Statistics estimated that inflation for low-income households was 11.9 per cent in October 2022, leaving many people struggling to cope.

The current economic situation is a key part of our on-going review of the emergency act. Similar to the approach that we took to the coronavirus emergency legislation, we committed to reviewing and reporting on the on-going necessity and proportionality of the act’s provisions. The Parliament will recall that, during the passage of the bill, in recognition of the distinctive ways that the rent cap provisions would impact social rented sector landlords in particular, the Government lodged a stage 3 amendment in which it committed to setting out its intentions, beyond 31 March, for the rent cap provisions relating to the social rented sector in its first report to the Parliament and no later than 14 January.

That is where I will start. I have been clear from the outset that I want to work with the social rented sector to seek an agreed way forward as an alternative to the continuation of the rent cap beyond March 2023. The Parliament will be aware that we have been working closely with a range of social rented sector organisations, including the Convention of Scottish Local Authorities, the Scottish Federation of Housing Associations and the Glasgow and West of Scotland Forum of Housing Associations, through a task and finish group. Statements of intent were published late last year by COSLA, which confirmed local authorities’ commitment to keeping rent increases in April 2023 to an average of no more than £5 a week, and by the Scottish Federation of Housing Associations, which reported that its members are consulting with tenants on a set of increases in April 2023 that will average 6.1 per cent.

Although I anticipate that many rents will be increased at a level that is well below those figures, the agreement to set out average figures rather than a fixed cap allows for flexibility for social landlords to respond to their consultations with their tenants, which are part of their statutory responsibilities as landlords. Some social rented sector landlords might, for specific reasons, have to go beyond those rent levels—for example, to allow for planned improvements or maintenance to proceed as agreed through tenant engagement. That will allow for the statutory tenant consultations that are currently taking place to be taken into account in housing associations’ business plans and local authorities’ housing revenue account plans. No social landlord is consulting on a rent increase that is at or above consumer prices index inflation, which was 11.1 per cent when the data was collected. In the light of the voluntary agreements that have been reached across the social rented sector, I can confirm that we will introduce legislation to expire the social rented sector rent cap provisions from March 2023.

Having set out the position on social sector rents, I will turn to how other parts of the emergency act and other parts of the rented sector will be affected. The report to the Parliament that the Scottish Government has published today sets out that the Scottish ministers have undertaken a review of the provisions in part 1 of the act in order to consider whether they remain necessary and proportionate in connection with the cost of living. The first report considers the status of measures through to 31 December—the initial period that was covered by the legislation—and alludes to what factors might be taken into account after 31 March to determine the on-going necessity of the measures, which will be subject to a separate parliamentary process later this month.

At the end of the first reporting period, it is clear that the unprecedented economic challenges are continuing to have an acute impact on those who rent their homes. Therefore, having considered the outcome of the review, the Scottish ministers are satisfied that the status of the provisions in part 1 of the act is appropriate at the end of that reporting period. That will be kept under review.

On the next issue, although the Scottish Government is committed to expiring or suspending specific provisions when they are no longer necessary, emerging evidence on the cost crisis makes it likely, at present, that some provisions of the act will be required after the current expiry date of 31 March 2023. For example, to continue to reduce the impacts of eviction and homelessness on tenants in the social and private rented sectors, it appears crucial for the current moratorium on evictions to continue with, of course, the safeguards that were put in place last October.

In addition, the Parliament will be aware of the distinct differences in operation between the social rented sector and the private rented sector. Private renters still face economic challenges, and there is not the opportunity to agree a collective voluntary approach in the private rented sector, given the sector’s very different nature. I therefore anticipate that it will remain necessary and proportionate to extend beyond 31 March the rent cap provisions in the private rented sector, although I recognise that the act gives the power to vary what the cap is.

The rent cap in relation to student accommodation is also being considered—particularly in the light of the evidence that shows that it is having a very limited impact because of the different way in which such tenancies are managed. I hope to set out our intentions on that very soon.

We will continue to weigh up all such matters and bring them back to Parliament soon with specific proposals that are based on the most up-to-date evidence that is available. The decision on whether to extend is for the whole Parliament to make, and we look forward to hearing the outcome of the future consideration of such matters.

As is required by section 9 of the act, the Scottish ministers have conducted a review of the provisions in part 1 and have prepared a report. We are satisfied that the status of the provisions that are set out in part 1, as at 31 December 2022, remains appropriate. We have also undertaken a review of the associated Scottish statutory instruments. The Scottish ministers are also satisfied that the status of those SSIs, at the end of the reporting period, is appropriate.

The provisions that we report on today are one part of Scotland’s on-going response to the cost of living crisis. The Government will continue to do our duty to report and to be held accountable to Parliament for the use of the powers. We welcome the opportunity to engage with MSPs as the first report is considered.

I am sorry that it appears that Miles Briggs did not listen to part of my statement. I made it clear that, in the social rented sector, the position of COSLA and the SFHA means that we are looking at an average increase of no more than £5 a week, or 6.1 per cent, in those two parts of the social rented sector.

Given the concerns that were expressed by members across the chamber about the need to balance protection for tenants with protection for social housing providers—so that they can invest in the quality of homes, in maintenance and in supply, as well as in the wider services that they provide—I would have hoped for a strong welcome for the fact that we have reached an agreed way forward with the social rented sector, but that does not seem to be the case with Mr Briggs. He describes the legislation as a disaster, but I think that it would have been a disaster if Parliament had not taken the action that we proposed and tenants, particularly in the private rented sector, who had been landed with 10, 20, 30 or even 40 per cent rent increases, continued to be exposed to that kind of practice. That is still happening south of the border. It is not happening here as a result of the actions that we have taken.

Some of the other questions that Mr Briggs raised are about either the measures that we will bring forward later this month in relation to the future of the cap for the PRS or, indeed, the longer-term work that we are doing to reform the rented sector. Again, although it might already be forlorn, I express the hope that Mr Briggs will join other members in recognising that the rented sector needs continued attention and legislation to ensure that, in the future, people’s human right to decent, adequate and secure housing is met in a way that it has not, so far, been met for everybody.

We have certainly been in regular dialogue with representatives of the private rented sector, who I have to say included not only landlords and investors but tenants, whose voices also deserve to be heard. We have maintained that dialogue. Clearly, when we debated the bill the Conservatives opposed the principle of having a rent cap in the private rented sector. They are entitled to that view. However, I would point out what has been happening to rents in the private rented sector south of the border in the absence of such measures. Rents have been rising at a faster rate than has been seen for a long time. Supply is also deeply challenging. The concentration of property wealth among those who own multiple properties as landlords, or as businesses that operate as landlords, has more than doubled in 10 or 20 years.

The situation in Scotland therefore requires longer-term reform, which the Government is committed to undertaking. However, I suggest to Jamie Greene that he should recognise that, in the absence of such measures, we would be seeing a far more unacceptable position for tenants in Scotland.

We have been actively engaged in doing so. We believe that the number of applications for using the prescribed costs available has been relatively low. However, we are continuing to work with the organisations that are part of the landscape and the machinery of delivering that form of protection for landlords, given that not all landlords are in the same financial circumstances. We will continue to keep the issues under close consideration as we move forward with the short-term measures and the longer-term work on reform.

I certainly disagree with that analysis. The idea that the serious challenges with regard to student accommodation, which have been experienced for years in Scotland and have been growing south of the border, too, relate to emergency or longer-term work on rent controls in Scotland is simply spurious.

There are other European countries with a private rented sector that is larger than ours by share of the housing stock that have had rent control systems in place for decades. High-quality, affordable, sustainable and secure housing is absolutely affordable. Further reform is required.

My final point to Mr Kerr is that the thing that is least disputable about the situation is that, if we had not taken action, tenants in Scotland would have been lumbered with the same kind of excessive, eye-watering increases that tenants south of the border are living with.

That is a hugely important aspect, and it is relevant to the whole of my heat in buildings portfolio. The Passivhaus concept and improvements to building standards are one important aspect of delivering this in new builds. However, if we are going to achieve what we need to on the wider heat in buildings side, the supply chain and the skills are absolutely critical.

We need to see that as an opportunity and not just a challenge. I believe that there is not just work to be done, but long-term, high-quality careers to be had in delivering the transformation in our built environment that we require, whether in insulating zero-emission heating systems, retrofitting existing buildings for energy efficiency or improving the way in which we deliver new-build housing.

I absolutely agree that the Government’s work on the supply chain delivery plan for heat in buildings and other aspects of the work that we are doing to support skills in that area will be critical to the issue of Passivhaus-equivalent standards, but they will be equally critical to the rest of our heat in buildings agenda.

We do need to continue what we are doing, which is carrying out our ambitious approach to accelerating the retrofit agenda as part of the wider heat in buildings programme.

I reinforce what I said in my opening remarks: the commitment to the Bute house agreement in August 2021, which included explicit support for Passivhaus, was part of a much wider set of policy priorities to accelerate Scotland’s move towards zero-emission heating, high levels of energy efficiency and the heat in buildings agenda.

It has never been clearer than it has been over the past year or two that this is not just about reducing carbon emissions, critical though addressing the climate emergency is; it is also essential if we are to meet the cost of living challenge and remove the vulnerability that people are exposed to through high and volatile fossil fuel prices. The Passivhaus standard and improving the way in which we deliver new builds can teach us valuable lessons about how we can systematise some retrofit approaches, too.

We continue to do a huge amount to accelerate work in this area. I am grateful that we have the political support of a good number of members across the chamber, and I look forward to that continuing.