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Can I just clarify that the member is referring to minimum standards in energy efficiency as well as quality?

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 per cent 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 that 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.

Over the same time period to which Daniel Johnson refers, we have also seen an increase in the number of people who are struggling to pay rent. A significant issue is the increasing unaffordability of homes and rents, with people being unable to secure tenancies, never mind get into any other type of tenure across the housing market.

Many of us believe that the housing market itself is fundamentally broken, and my proposed measures are designed to protect those who are—not always, but in many cases—the most vulnerable. That includes not just those renters who cannot afford to buy or who choose not to be owner-occupiers, but people who have been faced—as the modelling has shown—with an increase in rent of more than 100 per cent in the past 15 years. Very few people—I would go so far as to say virtually no renters—have seen their income increase by anything like that amount. That is what my amendments seek to address.

Amendment 332H seeks to ensure that a freeze or a cut is possible, in order that the way that rates have soared in certain areas can be taken into account.

My proposed changes to amendment 289 address changes to rent control areas themselves. Amendment 289 would allow the regulations to be revoked or the size of the areas to be decreased. However, the experience of a rent control area might show that the area is too small, so my amendment 289A would add the option of increasing the size of the area. I accept the cabinet secretary’s point that that would imply the designation of a new rent control area, and I understand that there is hesitation to apply an increase without going through the process of analysis that leads to such a designation. However, that information will be forthcoming in the analysis of existing rent control areas, and I think that it could be used to justify increasing the size of an area. That does not mean that the provision would have to be used in that way, but it could be.

I will speak briefly to some of the other amendments in the group. Amendment 412, in the name of Katy Clark, and Edward Mountain’s amendment 147 would allow for the quality, energy efficiency and state of repair of a property to be taken into account when controlling rent. The Greens have lodged amendments to other parts of the bill with the same intent, and, as I think that amendments 412 and 147 would support those Green amendments, I am happy to work with Katy Clark and Edward Mountain on them and will support them if they are moved. After all, we need an effective and consistent approach to drive up the quality of private rented accommodation.

On amendments 49, 61 and 64, in the name of Graham Simpson, which seek to allow rents to be increased where they have not been increased recently or where they are significantly below the open market rent, I am a little bit concerned not just about the complexity that might arise but about the uncertainty that the amendments might create for tenants and renters. Open market rents are already inflated, because of the way in which they are worked out, so using them as a reference point at the moment might be flawed. However, I will be interested to hear what Graham Simpson has to say.

Amendments 66 and 67 would allow rents to be increased to recoup costs related to the maintenance, improvement or regulatory compliance of rented properties. For me, that has the potential to send the wrong message to landlords, specifically in respect of regulatory compliance. We should not be rewarding landlords just for getting their rental properties up to a minimum legal standard by allowing them to raise rents. I ask Graham Simpson to address the point about compliance, in particular, because we should not be rewarding people just for meeting basic compliance standards.

Finally, on Rachael Hamilton’s amendment 207, I listened carefully to her comments about the need to be clear about what we mean by rents and what utilities may or may not be included in them. As her amendment would help to provide clarity in that regard, we will support it.

I will leave my comments there, convener.

Over the same time period to which Daniel Johnson refers, we have also seen an increase in the number of people who are struggling to pay rent. A significant issue is the increasing unaffordability of homes and rents, with people being unable to secure tenancies, never mind get into any other type of tenure across the housing market.

Many of us believe that the housing market itself is fundamentally broken, and my proposed measures are designed to protect those who are—not always, but in many cases—the most vulnerable. That includes not just those renters who cannot afford to buy or who choose not to be owner-occupiers, but people who have been faced—as the modelling has shown—with an increase in rent of more than 100 per cent in the past 15 years. Very few people—I would go so far as to say virtually no renters—have seen their income increase by anything like that amount. That is what my amendments seek to address.

Amendment 332H seeks to ensure that a freeze or a cut is possible, in order that the way that rates have soared in certain areas can be taken into account.

My proposed changes to amendment 289 address changes to rent control areas themselves. Amendment 289 would allow the regulations to be revoked or the size of the areas to be decreased. However, the experience of a rent control area might show that the area is too small, so my amendment 289A would add the option of increasing the size of the area. I accept the cabinet secretary’s point that that would imply the designation of a new rent control area, and I understand that there is hesitation to apply an increase without going through the process of analysis that leads to such a designation. However, that information will be forthcoming in the analysis of existing rent control areas, and I think that it could be used to justify increasing the size of an area. That does not mean that the provision would have to be used in that way, but it could be.

I will speak briefly to some of the other amendments in the group. Amendment 412, in the name of Katy Clark, and Edward Mountain’s amendment 147 would allow for the quality, energy efficiency and state of repair of a property to be taken into account when controlling rent. The Greens have lodged amendments to other parts of the bill with the same intent, and, as I think that amendments 412 and 147 would support those Green amendments, I am happy to work with Katy Clark and Edward Mountain on them and will support them if they are moved. After all, we need an effective and consistent approach to drive up the quality of private rented accommodation.

On amendments 49, 61 and 64, in the name of Graham Simpson, which seek to allow rents to be increased where they have not been increased recently or where they are significantly below the open market rent, I am a little bit concerned not just about the complexity that might arise but about the uncertainty that the amendments might create for tenants and renters. Open market rents are already inflated, because of the way in which they are worked out, so using them as a reference point at the moment might be flawed. However, I will be interested to hear what Graham Simpson has to say.

Amendments 66 and 67 would allow rents to be increased to recoup costs related to the maintenance, improvement or regulatory compliance of rented properties. For me, that has the potential to send the wrong message to landlords, specifically in respect of regulatory compliance. We should not be rewarding landlords just for getting their rental properties up to a minimum legal standard by allowing them to raise rents. I ask Graham Simpson to address the point about compliance, in particular, because we should not be rewarding people just for meeting basic compliance standards.

Finally, on Rachael Hamilton’s amendment 207, I listened carefully to her comments about the need to be clear about what we mean by rents and what utilities may or may not be included in them. As her amendment would help to provide clarity in that regard, we will support it.

I will leave my comments there, convener.

Good morning to the cabinet secretary and officials. In many ways, this grouping relates to the most important part of the bill. If the bill is passed, the provisions in this section will allow the introduction of rent controls for the first time in Scotland for almost 40 years. They could not have come a moment too soon. Since 2010, the rent for a two-bedroom property has increased by 61 per cent, on average, across Scotland but by 82 per cent in Glasgow and by a staggering 104 per cent in Lothian. Has the quality of properties soared to match those rent increases? No. Have people’s wages in Lothian gone up by 104 per cent since 2010? Certainly not. That is a sign of a fundamentally out-of-control private rented sector.

My amendments to the minister’s amendment 332 would change the formula that the Scottish Government has proposed, which would cap rents at CPI plus 1 percentage point up to a maximum of 6 per cent. My alternative proposal is to cap rents at the lower of CPI or earnings growth up to the same maximum of 6 per cent. That is an important principle. I have asked the Scottish Parliament information centre to model both of those formulas. The Green version would make a small but significant difference to rents in most areas and a bigger difference in others. Had the Green formula been applied in Glasgow since 2019, rents would be £19 a month lower than if the Scottish Government’s formula had been in place. In Aberdeen and Aberdeenshire, they would have been £66 lower. For many renters who are struggling with low incomes and the rising cost of living, that would represent significant help.

More importantly, though, my amendments would establish an absolutely critical principle that rents should match people’s ability to pay. If the earnings and living standards of renters are not increasing, neither should those of landlords. It is interesting that analysis has not been undertaken to justify the principle that the cabinet secretary set out—that other income is available for renters, beyond wages. We have very little evidence of that, and we know that most renters do not have significant other income. For landlords’ incomes to rise more quickly than those of renters is nothing more than the pure extraction of wealth from those on lower incomes by those who are privileged to own properties.

It is simply not acceptable to have in legislation the raising of rents by 1 percentage point above the cost of living as a given, regardless of what else is happening in the world. We should not be locking in above-inflation increases, which is what the Scottish Government’s formula does.

My amendment 332H would add an extra but important provision. It would allow ministers to specify exemptions to the formula in order to allow lower increases, a freeze or a decrease. I will speak to that principle more fully in the debate on the next grouping, in which I have a similar set of amendments. I have lodged amendment 332H to recognise that, in some areas of Scotland, rents have gone up by as much as 100 per cent in the past 15 years and that even a small increase would simply pile misery on top of that. In 15 years, very few renters have seen their incomes go up by anything approaching 100 per cent.

I thank the cabinet secretary for that.

I press amendment 148.

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?