Chamber and committees

Bob Doris is quite right—not least in referring to the requirements under pre-action protocols. I think that all of us in the chamber recognise that landlords in the social rented sector do not pursue evictions in cases of rent arrears or on other grounds without good reason. They tend to take the approach that evictions should be the last resort. I think that the whole Parliament should have confidence that they will continue to act in that spirit.

Therefore, in summary, I cannot support amendment 8 and I urge members to reject it.

I turn now to my amendments 7, 9, 11 and 12. The amendments will provide additional exemptions to the moratorium where a tenant is no longer an employee of a landlord. We have listened to concerns that were raised during stage 2 about the need for additional exemptions to enable employers to recover a property where an

“employee of an agriculture, forestry or other rural land-based business”

no longer works for them and they require the property for a new employee. We recognise the importance of all employers being able to recover a property where the tenant is no longer employed in order to free up that accommodation for a new employee, particularly during the current economic crisis.

We do not think that it is appropriate to create a new ground at this time, as was proposed by Jeremy Balfour, and we have therefore based the exemptions on the existing grounds for repossession.

As Mr Griffin said, he lodged amendments yesterday that were welcome but not quite in a form that we were able to support. I thank him for bringing them back and working with us to ensure that they are in a form that we can support.

Ensuring that landlords have to clearly evidence financial hardship will be an important part of making the moratorium and safeguards work in practice for landlords and tenants. The addition of the examples of evidence that the tribunal can seek and consider is, therefore, welcome.

I urge members to vote for all the amendments in the group.

Obviously, we are not ignoring—not for a moment—the financial aspects, but they are matters for discussion between the Government and the sector as part of the work of the short-life task-and-finish group. That is the appropriate place for those matters to be considered. I do not believe that they need to be included in the text of the amendment.

I do not have anything to add to what I said in my opening remarks on the amendment. I encourage members to vote for it.

Amendment 2 agreed to.

Section 10—Expiry of section 9

I hope that amendment 2 will go some way towards allaying some of the concerns that were expressed in relation to the previous group.

As I alluded to a moment ago in relation to amendment 1, I want to ensure that the legislation further reflects the distinctive circumstances of the social rented sector. That acknowledges the concerns that were expressed across the chamber yesterday, and were clearly heard. It is right that tenants in the social rented sector are protected during this time, but we also recognise that there are critical differences in how rents are consulted on and agreed, and in how the sector is funded compared with the private rented sector.

With all that in mind, as I have indicated, we have committed to working closely with the social rented sector through an official-led short-life task-and-finish group to consider the best approaches from 1 April onwards. On top of that, the cabinet secretary and I have welcomed recent opportunities to discuss the way forward with representatives of registered social landlords and local authorities.

We are keen to develop an agreed way forward, and we are optimistic that that can be done at pace and in a genuine partnership with the sector. Our aim is to ensure the best possible balance between keeping rents affordable and continuing social rented sector investment of rental income in quality homes and appropriate wider support to tenants.

Amendment 2 commits the Government to setting out a decision to provide certainty to the social rented sector by 14 January 2023 at the latest as part of the required three-month reporting requirements in the bill. The amendment requires us to confirm whether we intend to raise the cap, suspend or expire the rent restrictions, or continue with a zero per cent cap for the social sector only. We want all social landlords to be as clear as possible as early as possible, and we look forward to developing an agreed approach that will inform that decision. That is absolutely our preferred way forward.

I want to give the sector a very clear direction of travel as soon as possible, and I trust that the proposed amendment provides clarity on the timeframe for that critical decision being made well ahead of 1 April next year. I can also give a commitment today that we will bring forward any required regulations to underpin that approach, including ensuring that social landlords will be able to practically raise rents from 1 April next year if that is part of the agreement that we come to.

We want to move forward in a collaborative way. We will be looking to set out the principles and process in partnership with the short-life task-and-finish group to inform social landlords’ consultations with their tenants and ensure that those go ahead in the coming months. Those consultations with tenants will be critical in informing our approach and the decision that we set out in January.

I encourage members to support the amendment.

I move amendment 2.

I appreciate that this is a probing amendment. I welcome the importance that Pauline McNeill attaches to the rent adjudication measures in the bill, which play an important role. We recognise that, once the rent cap ends, a large number of landlords could seek all at once to increase rents. In those circumstances, resetting rents by reference to the open market could result in unmanageable increases for tenants.

It is expected that the existing rent adjudication process will not provide an appropriate mechanism for determining reasonable increases as we transition out of the emergency measures that the bill provides for. It is therefore essential to have a means of amending the adjudication process temporarily, to protect tenants when we move forward—if that is needed—and to ensure that rents do not rise exponentially when we transition out of the application of the rent cap.

We do not intend temporary changes to become permanent. As Pauline McNeill knows, under the new deal for tenants, longer-term work that is on-going will lead to a new housing bill next year. Further work will take place later in the parliamentary session, too. In the programme for government, we reaffirmed our commitment to bring forward long-term rent controls.

Pauline McNeill gave the example of the tribunal deciding to increase rent beyond the level that the landlord had proposed. Within the temporary measures is one form of adjustment that the Government might consider making when we develop proposals.

If Pauline McNeill’s intention is to introduce permanent measures now, I refer her to the response that I gave yesterday to several groups of amendments, which is that emergency legislation is not the place for such measures. We look forward to working collaboratively with members across the Parliament as we develop our longer-term proposals, and I invite Pauline McNeill not to press amendment 3.

We are actively discussing that area and we want to ensure that the options for the kind of transfer that Mr Griffin refers to are explored. The cabinet secretary, colleagues and I have had that discussion and I am happy to ensure that we keep Mr Griffin informed. However, the right place to look at the issue and to make changes to it is in the context of our longer-term reforms under the new deal for tenants.

I would be pleased if Mr Griffin decides not to press those amendments. If he does decide to press them, I am afraid that I will have to ask members to vote against them.

Although I appreciate that amendment 8 is very well intentioned, I do not believe that the methodology that was used to arrive at a revised threshold of £8,500 for social sector rent reflects the average rent arrears for households that were evicted from that sector. The £8,500 figure is likely to be a significant overestimate. The calculation in the Shelter Scotland report that was used to develop that figure includes arrears in cases where there was no eviction, such as where a tenant with arrears had left a property of their own volition. It also includes other arrears, such as the cost of repairs that a landlord might be trying to recover from a tenant. The £8,500 threshold that is proposed in the amendment would be approximately equivalent to two years’ worth of rent arrears. That level of rent arrears is not in the financial interest of either the social landlord or the tenant, who will still be liable for the arrears even if they are evicted.

Amendment 19 would oblige the Scottish ministers to lay regulations that

“provide for data on rents to be added to the Scottish Landlord Register ... in order to inform any rent control measures being considered by the Scottish Ministers.”

I welcome the fact that Pauline McNeill has lodged amendment 19 for discussion, and she made some very fair points in presenting it, but there are a number of problems with the amendment. It does not detail what data is to be added to the landlord register; it does not specify how that data is to be collected; and—perhaps crucially—it does not create any powers to collect the data or place obligations on landlords or, indeed, tenants to provide data to the local authorities that operate the register in each local authority area.

Accordingly, additional legislation would be required to mandate the provision of data on rents by all landlords in Scotland. We would also require to put in place a robust statistical data collection system, which is not something that the Scottish landlord register is designed to deliver. The register does not currently contain any information about tenancy terms.

As Pauline McNeill rightly pointed out, we set out proposals for a rent data collection system in “A New Deal for Tenants”, and that received a high level of support in the consultation. However, that will take some time to deliver if we want to get it right and is not best dealt with through the temporary emergency legislation that we are debating today.

I have already set out our commitment to deliver on our new deal for tenants during the course of this session of Parliament. As part of that longer-term work, we will examine how we can improve data on the private rented sector in Scotland. I have had discussions about that with Labour colleagues in the past, and I would be very happy to set up a meeting with Pauline McNeill and my officials to discuss how we can improve data as part of our longer-term development of national rent controls.

However, for the reasons that I have set out, I cannot support amendment 19. Pauline McNeill has indicated that she does not intend to press it, and I would welcome that. If she presses it, I must urge members not to support it.

I know that the member and his colleagues will be concerned about the resources that are available to the tribunal. What level of resourcing would have been necessary for the entire private rented sector to be pushed through the tribunal, with that being required every time any landlord in Scotland wanted to change the rent?

I would like to first address amendments 6, 10, 13 and 14 together. These amendments would remove the ability of a lender to recover a property where they need to repossess it because the landlord has defaulted. I understand the member’s concerns and the desire for the property to be sold with the tenant in situ, but we need to recognise that it is still important to ensure the continued viability of the sector and that the lender in those circumstances has a legal duty to recover the debt that is owed through the sale of the property.

Over the past few weeks, we have seen the disastrous consequences for the market of United Kingdom Government proposals. The approach that we have taken in the bill recognises the need to support the continued lender confidence that underpins the sector. Our approach also recognises that, if the borrower—the landlord—is in financial difficulty, preventing the sale of the property will only prolong that unavoidable process.

I am assured that the industry has introduced tailored support, including forbearance, which has been refined following the experience of the Covid pandemic and leaves eviction as a last resort that occurs only after a court has carefully considered the borrower’s individual circumstances. I note that all the possession cases that are going through the court system now involve people who were in long-term financial difficulty pre-pandemic. I must consider the fact that applying the moratorium to those cases will only cause further delay. It could bind owners to further debt and prolong uncertainty for tenants as well.

I am further assured that the Financial Conduct Authority requirements that were introduced during the Covid period have remained. That allows lenders to engage with customers at an earlier point in order to support owners and, therefore, to support tenants. Where a tenant is evicted in such circumstances, should they be unable to find alternative accommodation, the local authority is required to provide anyone at risk of homelessness with support and assistance.

There is a strong case, which we will look to fully explore, for ensuring that all options are available for private rented sector properties to transfer to social rented ownership, with support for tenants to remain in their homes through the transition.

I do not share Mr Griffin’s concern that the figure currently in the bill would set a new norm. The Government does not believe that that would be the case.

I think that there is an intervention from behind me.