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I appreciate that Maggie Chapman is frustrated by the gap, but I go back to the point that I made about the arrangements being transitional. It was important that we supported people through the transition out of the rent cap, but that measure was intended to be temporary and exercisable only on or in anticipation of the expiry of the rent cap measure in the Cost of Living (Tenant Protection) (Scotland) Act 2022, and, through regulations that were approved by Parliament, they could apply for a 12-month period. Therefore, I go back to the fact that they were not designed to be a bridging mechanism to longer-term rent controls.

The existing mechanism for adjudicating rent increases under the Private Housing (Tenancies) (Scotland) Act 2016, which is based on open market rent, will continue to operate as intended, protecting tenants from unreasonable rent increases.

I cannot support amendments 186, 196 and 199 and urge Maggie Chapman not to move them. If they are moved, I urge members not to support them.

Amendments 424 to 426, in the name of Maggie Chapman, would provide for the introduction of special rent control areas. In those areas, a rent cap could be set, for up to one year, below the level of the rent cap that would apply under my amendment 332. Maggie Chapman’s amendments would enable the rent cap in a special rent control area to be set at 0 per cent, or even a negative figure, requiring landlords to reduce rents.

Although I recognise that Maggie Chapman has concerns with the fixed rent cap being proposed in my amendment 332, I consider that it is necessary to provide clarity for landlords, tenants and investors on the impact of rent control in those areas where it will apply. The amendments would remove that clarity and would reintroduce the uncertainty that landlords and investors have called on the Scottish Government to address.

For those reasons, I urge Maggie Chapman not to move amendments 424 to 426. If they are moved, I encourage members not to vote for them.

I absolutely see where Maggie Chapman is coming from. I think that we will come back to the issue when discussing other parts of the bill. This is about trying to ensure that we make the bill as nuanced as possible. The Government is determined to provide clarity to tenants, landlords and investors on many aspects, so I would be happy to discuss the issue with Maggie Chapman in the run-up to stage 3. However, in all those discussions, my underlying principle will be our need to provide clarity to investors. I would be hugely reluctant to do anything that would detract from that clarity, which the Government is seeking to bring through its stage 2 amendments.

I am not aware of such analysis having been undertaken to a point at which I could speak to it today, but I would be happy to have that discussion with Ms Chapman following stage 2. I appreciate that this is an area that she has been concerned about for some time, and we would be happy to carry on those conversations. For the avoidance of doubt, it is unlikely that Ms Chapman will change my mind on the Government’s position, because we believe that clarity is important. However, I am happy to work with her to see whether we can bring forward some analysis to have that discussion before stage 3.

Amendments 332G and 332H, and consequential amendment 410, would allow the rent cap to be set at a negative percentage in certain circumstances, which would reduce the existing rent of a property. The purpose of rent control has been set out as to stabilise rents in areas where they are rising steeply; the measures are not intended to allow for a reduction in existing rents. I do not consider that providing for an automatic requirement for rent reductions in certain economic circumstances in that way would allow for rent control to operate in a proportionate way.

Further amendments in Paul McLennan’s name in this group are consequential or clarifying amendments. Those include amendments 333 to 353, which make required drafting changes to section 19.

Amendment 393 would amend section 52 to remove reference to section 13(1) from the list of powers that are subject to the affirmative procedure. That is in consequence of Meghan Gallacher’s amendment 107, which would remove section 13 of the bill. We support amendment 107, as the Government’s amendment 329, which was considered with group 7, will move that power from the bill into the Private Housing (Tenancies) (Scotland) Act 2016, in consequence of amendment 332, which specifies the rent cap in the 2016 act.

Amendment 398 would amend the schedule to the bill and is consequential on amendment 329.

Amendments 401 and 402 are consequential amendments to the schedule to the bill. They provide for regulations that are made under various sections to be subject to the affirmative procedure.

Finally—the committee will be pleased to know—amendment 406, which also seeks to amend the schedule, is consequential on amendments 107 and 329.

In summary, I urge members to support Paul McLennan’s amendments in the group, and I ask Katy Clark, Edward Mountain, Rachael Hamilton, Ben Macpherson, Graham Simpson, Daniel Johnson and Maggie Chapman not to move their amendments in the group. If they move them, I urge members of the committee not to support any of them, for the reasons that I have given.

I move amendment 281.

I am afraid so, but I can also point to some technical challenges. Wage growth is not, as I mentioned earlier, a direct measure of changes in household income, but there are other complexities with regard to the measures in question. For example, the data from the annual survey of hours and earnings is published only once a year, with a significant lag. Although average weekly earnings data is published on a monthly basis, the headline measure, which includes bonus payments, can be very volatile. Moreover, it is not a measure of rates of pay, as it can be affected by changes in the composition of workforces, such as the proportions of the workforce that work full time and part time.

Although we might disagree, I hope that that at least reassures Maggie Chapman that the issue has been looked at, and, as I have said, I am happy to carry on those discussions ahead of stage 3. I have to say, though, that it might be one of those areas where we will not be able to persuade each other on that point.

As for the points that have been raised by Ben Macpherson, Graham Simpson, Daniel Johnson and others, I think that, again, everyone is trying to get to the same place. We are trying to help landlords who help tenants, and we are endeavouring to provide clarity to the sector.

Graham Simpson challenged me—he wants clarity ahead of stage 3. I cannot say when stage 3 will happen, but I again reassure him that we will expedite work in this area. When I look at our work on the bill, and as we go through this process, I feel that one of my integral responsibilities is for the Government, and other parties, to provide clarity and certainty to investors. I will do everything that I can do on the issue. Moreover, I heard what he had to say about the meeting with the PBSA review group, and we will work on that matter.

With regard to Daniel Johnson’s comments about what he wishes to see at stage 3, I do not want to repeat myself, but we do have a live consultation at the moment. If he believes that more reassurance is needed before we get to stage 3, I am happy to have those discussions with him to see what can be done. Again, though, I caveat that by saying that I do not want to pre-empt the consultation or do anything that would get us into difficulties as a result of our putting something in the bill that we have not consulted on.

I will leave it there, convener.

I ask for the committee’s forbearance, because my speaking notes for this group are quite long—I apologise in advance for that—as they cover a number of amendments from a number of members. It is important that I try to set out in detail the work that has been done on the amendments and the fact that we are keen to work with members as we move forward.

The measures that are set out in sections 15, 16 and 17 of the bill will provide local authorities with the power to request certain data from landlords where the local authority considers that that could provide it with relevant information in connection with its duties under part 1 of the bill. Those provisions support the local authority to undertake its function of assessing rent conditions in its area.

Having heard the issues that have been raised by stakeholders, we share the view that amendments are required at stage 2 to further strengthen the data collection powers in the bill. I thank all members who have lodged amendments on the issue. We have given them careful consideration, and I look forward to the discussion that we will have.

However, the Government has lodged its own set of alternative amendments, which we think strike the correct balance in allowing for information to be collected in a practical and cost-effective way. In designing those amendments, we have given consideration to the committee’s stage 1 report, which noted that

“local data will be vital to determining whether rent control areas are required”,

as well as identifying the need for a

“national approach to data collection”.

Our set of amendments will give the Scottish ministers powers to collect data from landlords that will facilitate partnership working and data sharing between local authorities and the Scottish Government. That will allow greater flexibility for national and local-level data collection to be delivered in the most practical and cost-effective fashion.

Looking forward, we are committed to working closely with our local authority partners as they put the assessment process into operation. I have listened closely to their concerns about the resource implications of the assessment process and the collection of information, and that has influenced the amendments that we have lodged. Our further engagement will include how the Government can best support the collection of the information that is needed to enable a robust assessment of rent conditions in all 32 local authority areas.

Although we have concerns about the implications of some of the amendments that have been lodged, it is clear that there is consensus across all parties on the need for robust data. In that spirit, I take the opportunity to invite members who have lodged amendments on data collection to join our planned engagement with local authorities over the coming months, during which we will begin to set out options and plans to put processes for local authority assessments into operation. That will allow members to fully understand the potential impacts that some of the proposed amendments would have on local authorities, with a view to working with our local government partners and the Scottish Government on any further amendments that may be needed ahead of stage 3. My door remains open to members for further discussion on the issue.

I turn to how the Scottish Government sees the partnership approach being put into practice. We already publish statistics on advertised rent levels by broad rental market area. We are also taking steps to supplement that to provide data at local authority level, which will provide a solid starting point for the local authority assessment process and aid our understanding of rent levels. All of that will be underpinned by guidance for local authorities, which we are committed to co-authoring alongside members of our local authority working group on rent control. As well as ensuring that there is a consistent approach across Scotland, that will provide for the local flexibility that we all know will be crucial.

Further Government amendments in the group include amendments that will expand the list of information that local authorities and the Scottish ministers can request from landlords regarding their property. We propose consequential amendments to sections 16 and 17 so that the Scottish ministers, as well as local authorities, will be able to apply to the First-tier Tribunal for Scotland for an order requiring up to £1,000 to be paid by a landlord who has failed to give information or has deliberately given false or misleading information. We also propose amendments that will provide for information sharing and co-operation between local authorities and the Scottish ministers to assist with the exercise of their respective rent control functions under the bill and to provide ministers with the powers to publish aggregated statistics.

I turn to the amendments relating to the potential to collect rental data through the landlord register. The landlord register does not currently operate as a register of properties; the information that is requested to assess compliance with legislative requirements is in relation to a landlord’s portfolio. I have significant concerns about amendments that would commit us to change the function of the landlord register to enable us to collect rental data from every landlord. Those amendments would place significant additional legal obligations on landlords and would impose new obligations on local authorities as the operators of the landlord register. Moreover, a redevelopment of the register itself would likely come at considerable cost.

I recognise, though, that clear systems and processes will be required to facilitate the collection of data from landlords in the most efficient and cost-effective way. My officials will consider that in partnership with local authorities.

I consider that the measures that are included in the bill, along with amendments 303 to 322 in Paul McLennan’s name, will enable effective partnership working with local authorities, which will provide for the collection of the necessary data to support rent controls in a more practical and cost-effective way.

I turn to those amendments in Paul McLennan’s name. Amendments 303 and 304 will allow the Scottish ministers, in addition to local authorities, to request information from landlords and tenants. That will help to facilitate effective partnership working between local authorities and the Scottish Government, which will be crucial in ensuring that we collect the right data in a practical and cost-effective way to support our long-term aspirations for rent control. Amendment 315 is a consequential amendment to reflect those changes.

Amendments 305, 306 and 308 are technical amendments to ensure that, if part of the house is subject to a tenancy or occupancy arrangement, information can be sought about each tenancy or occupancy arrangement.

Amendment 307 allows for the collection of information about the “frequency of rent payable”.

Amendment 309 sets out that information may be requested about

“whether the rent payable includes payment of any costs associated with the house and, if it does, the amount of each such cost and the matter to which it relates,”

as understanding whether the rent is inclusive of bills such as council tax and utilities bills is relevant to the rental value.

Amendment 310 allows for the collection of information about the date of the most recent rent increase and the amount and frequency of the rent that was payable immediately before that rent increase took effect.

Amendment 311 allows for information to be requested on the number of bedrooms, public rooms, kitchens, bathrooms and other rooms.

Amendment 312 allows for information to be requested on

“whether the house (or part of it) is fully furnished, partially furnished or unfurnished by the landlord”.

Amendment 313 allows for information to be requested on whether the house, or part of it, is subject to a sub-tenancy or other occupancy arrangement where the landlord is someone other than the person registered on the landlord register.

Collectively, that information will help to build up a picture of the rent that is charged for different types of property, which will support the assessment of rent conditions in local authority areas.

Amendment 314 provides that only one request can be made by a local authority or the Scottish ministers for the same information from the same person in one 12-month period. That is to protect landlords from having to respond to duplicate requests.

Amendments 316 to 318 make changes to section 15 of the bill to clarify the purpose for which information might be requested by a local authority or by the Scottish ministers and the frequency of requests. Those amendments will ensure that information can be collected outwith the local authority assessment and reporting cycles, as that might be necessary to robustly analyse trends in rental data.

I absolutely take Maggie Chapman’s point. That is not the intent behind the amendment, which is to prevent the need to do what she has mentioned.

I will ensure that I look at that as part of our work for stage 3, to examine whether there are any unintended consequences. The intent behind the amendment is to avoid duplication and to save landlords unnecessary bureaucracy. It is not to give a way out, should any person try to find one. I will come back to the member on that in the build-up to stage 3, to make sure that there are no issues there.

I absolutely hear Rachael Hamilton’s point, but I point to the nuance in her saying that most people—or whatever the exact phrase was that she used—would agree with the amendments. As I said earlier, I am very minded to take on board the points that have been raised with me. That is exactly why the consultation is phrased in the way that it is and why it has been brought forward. We have taken criticism from others for not having the consultation at the end of the bill and having it now, but that is because I want to provide clarity. If there was a way to do it more quickly, I assure Rachael Hamilton that I would do it, because, like her, I want to get to the point of providing clarity. However, I believe that that has to happen through consultation.

Amendment 104, in the name of Meghan Gallacher, would require Scottish ministers to exempt from rent control let properties for the duration that works are being undertaken by the landlord to eliminate or mitigate the risks to human life connected with any building materials, cladding or RAAC. The amendment would allow unrestricted rent increases in rent control areas for properties in which there were risks to the tenant’s life, whereas properties that did not contain such risks would be subject to the rent cap. Accordingly, I cannot support the amendment, but I understand and expect those discussions to be in the consultation and look forward to reading views in response to the consultation on that area.

Amendment 134, in the name of Meghan Gallacher, would require Scottish ministers to exempt from rent control properties that are let by landlords who have three or fewer rented properties. Although we are committed to ensuring that we deliver a system of rent control that values the contributions that private landlords make, that must be balanced against the purpose of rent control in stabilising rents. Amendment 134 would exempt a significant amount of landlords—I understand that it would be around 89 per cent of landlords at this time—so I cannot support it.

Amendment 151, in the name of Edward Mountain, seeks to exempt from rent control all properties that are let by the Secretary of State for Defence. Amendment 151 is not required, because a tenancy in which the landlord is the Secretary of State for Defence cannot be a private residential tenancy and, therefore, will not be covered by rent control.

Amendment 152, in the name of Edward Mountain, seeks to amend section 13 of the bill to require Scottish ministers to exempt from rent control by regulations properties that are let under relevant tenancies to an employee of the landlord. I am uncertain as to the rationale for not extending rent control to tenants on the basis of the tenancy being offered by an employer, as it cannot be presumed that such tenancies are not offered at or near to market rent. As such, I cannot support the amendment.

Amendments 329E and 329F, in the name of Maggie Chapman, would oblige Scottish ministers to exempt property only when the charge for that property is at or below the local housing allowance rate or the social housing rate for that area. That would remove the discretion of Scottish ministers to exempt any other category of property where the rent was charged above those levels, which is presumably not the intention of the amendments. The amendments do not clarify what is meant by local housing allowance rate or social housing rate. For those reasons, I cannot support the amendments.

The concern is that it is not a legal definition, so it is subject to change and to understanding, for example, when changes are made by the United Kingdom Government. Therefore, it would not be sensible to base our legislation on it.

Amendment 329J, in the name of Maggie Chapman, would put restrictions on the types of property that can be excluded from rent control, to prevent tenancies in which the landlord is a registered social landlord or a subsidiary of such a landlord from being exempt from rent control. Tenancies in which the landlord is a registered social landlord cannot be private residential tenancies, so they would not be caught by rent control in any event. The amendment would also prevent certain mid-market rent tenancies from being exempted. I can see no reason for such a restriction on the powers to exempt properties from rent control and, therefore, cannot support the amendment.

Amendments 329K and 329L, in the name of Meghan Gallacher, provide that there must be an exemption from rent control for landlords who work with charities whose purpose includes “the prevention of homelessness”. The exemption is widely framed, as it does not specify the nature or duration of such work. I cannot support that restriction on the exemption powers. However, as Meghan Gallacher mentioned in her opening remarks, I am sure that the issue will come out in the consultation and that the Government will have a view on it at that time.

Amendment 329M, in the name of Maggie Chapman, would place a restriction on the types of property that can be excluded from rent control, to prevent tenancies in build-to-rent properties from being exempt from rent control. An exemption for build-to-rent properties is being considered in the consultation, so I can see no reason for creating such a restriction on the powers to exempt properties from rent control and, therefore, cannot support the amendment.

I recognise that some stakeholders and members would wish for exemptions from rent control to be set out in primary legislation for circumstances in which landlords might be able to increase rent above the level of the rent cap. Others might have concerns about exemptions for specific types of properties and are keen for those not to be included. However, it is essential that decisions in relation to the matter are formed by full and open consultation, to allow all those people who will be affected to have their views considered. That will ensure that the impacts of any decision on the use of those powers are fully understood and that those exemptions and other safeguards are framed in a way that is clear and proportionate.

Bringing the consultation forward to now will provide the clarity that is being sought and will support us to introduce secondary legislation at the earliest opportunity, following royal assent to the bill. I am clear that that is the correct approach and reassure members that engagement will continue while the consultation is under way. I invite members who seek exemptions, or who want specific circumstances in which rents can be increased above the cap to be defined, to continue to engage with us during the consultation and as we develop any future regulations. I commit to discussing with members our views on what would be included in the regulations before we publish them. I hope that that reassures Meghan Gallacher about her point on the requirement for members to discuss those issues with the Government before regulations come before a committee.

During engagement with stakeholders, I have heard calls for exemption from rent control for properties that are let by social landlords for mid-market rent and build-to-rent properties. I acknowledge those calls and confirm that both those categories are included as part of the consultation that we published on 23 April. There is also space in the consultation to cover any other areas in which there should be an exemption.

Other circumstances where it might be appropriate for a landlord to increase rent above the level of the cap include when the landlord has made improvements to the property or when the landlord has consistently charged a rent that is below market rent. Those circumstances are also being considered.

On that basis, I urge Meghan Gallacher, Edward Mountain, Rachael Hamilton, Mark Griffin, Willie Rennie and Maggie Chapman not to press or move their amendments. If they do so, I urge members not to support the amendments in their names, for the reasons that I have set out, and I ask the committee to support the amendment in the name of Paul McLennan.

Much as I am tempted to get into an economic thesis on a Tuesday morning, I will refrain, but that is an important point. While we have talked about the specifics, it is also important to ensure that, in general, we provide as much certainty as we can to investors, because I recognise that not only the actions of Government, but the perceptions around that, are very important. It is important for the Scottish Government to encourage investment into Scotland and to encourage further private investment in housing; that is an important part of tackling the housing emergency.

Dealing with those aspects that you mention to ensure that we take into account what happens in the wider sector is exceptionally important, and that is why we are keen to give as much clarity as possible.

To return to my comments, CPI plus 1 percentage point is in line with what some stakeholders in the sector have been calling for. Stakeholders, including the Scottish Property Federation and the Association for Rental Living, welcomed the clarity that was provided by our statement in October last year, in which we confirmed the form of the rent cap that we are proposing through these amendments.

As it is not only the policy intention of rent control to reduce rents, if the total percentage determined under the formula is less than 0 per cent, the rent cap would be set instead at 0 per cent. As the form of the rent cap will be set out in the bill, several consequential or clarifying amendments are required. Amendments 281 to 301 and amendments 334 to 353 are necessary now that we are proposing to set out the form of the cap in the bill itself; they will ensure that all relevant sections of the bill interact appropriately with the new provisions that we have set out. Amendment 327 will make a minor technical adjustment to the wording of section 18.

I turn to the other amendments in the group. Amendments 47 to 50, in the name of Ben Macpherson, would let landlords in rent control areas who have not increased the rent for their property in the preceding 24 months set the initial rent for a new tenancy at the open market rate. I understand the intention behind those amendments, but I am clear that the circumstances in which rent can be raised above the rent cap should be set out in regulations, informed by consultation with those who are affected, as I mentioned earlier.

Amendment 77, in the name of Graham Simpson, would provide that regulations that were made under the power that would be created by amendment 48, in the name of Ben Macpherson, would be subject to the affirmative procedure. Amendments 61 to 64, 78 and 79, in the name of Graham Simpson, would create a process by which a landlord in a rent control area could increase the initial rent for a tenancy to open market rent where the final rent in the preceding tenancy was more than 10 per cent below open market rent.

Daniel Johnson’s amendments 61A, 61B, 63A, 64A, 64B and 64C would amend Graham Simpson’s amendments so that the process could be used by landlords only when the previous rent was no less than 10 per cent below open market rent.

Again, I understand very clearly that the intent behind the amendments is to recognise situations in which landlords have not increased rents such that they have fallen behind market levels. However, the amendments would enable some landlords to increase the rent regardless of whether there had been a rent increase in the preceding 12 months, and that would be inconsistent with the aim of limiting rent increases for a property in rent control areas to once per year. Therefore, I cannot support the amendments, but I can confirm that issues with regard to landlords charging below market rent have been included for consideration in the consultation that was published recently.

I absolutely see where the member is coming from. That said—and I fear that I might be repeating this quite often this morning—regardless of whether I think that it is the right or the wrong thing to do, the place for it to happen is not within the bill. The consultation will allow those exact points to be brought up and discussed so that we can then move forward with regulations. Members might well hear me say that quite a lot with regard to different amendments in a number of groups this morning, but that is exactly why we are having the consultation and asking those open questions. It will allow those matters to be brought forward. I hope that Mr Johnson will forgive me for not being pulled on that particular point, but I think that what he has raised is a matter for the consultation.

Amendments 65 to 68 and 80, in the name of Graham Simpson, would allow for rents to be raised above the level of the rent cap, where the landlord has incurred significant costs relating to the maintenance, repair or regulatory compliance of the property. The rent officer would be tasked with determining the appropriate rent where the costs are deemed to be necessary and significant, but the amendment does not set out what maintenance, repairs or regulatory compliance would be covered or the basis on which that determination should be made. Again, I very much recognise the concerns expressed by landlords on the potential impact of rent controls on maintenance costs and their ability to invest in improving and sustaining quality properties. It is important that those issues are considered further, which is why they are covered in the aforementioned consultation.

Therefore, I cannot support the amendments, and I encourage Ben Macpherson, Graham Simpson and Daniel Johnson not to move them. If they do so, I urge committee members not to support them, for the reasons that I have set out. It remains my position that the circumstances in which it would be appropriate to allow for rents to increase above the cap should be set out in regulations that are informed by the consultation, but I hope that I have managed to offer some reassurance to Mr Macpherson, Mr Simpson and Mr Johnson that I very much recognise and acknowledge the issues that they have highlighted in their amendments and that we are actively considering how to address them through the consultation. I would, of course, be happy to engage with members following the consultation’s outcome.

Amendment 147, in the name of Edward Mountain, and amendment 412, in the name of Katy Clark, seek to amend the bill to require that the rent cap be calculated with reference to the quality, state of repair and energy efficiency of a property. I have responded to calls from the sector to provide greater certainty on how rent controls will be implemented by bringing forward a suite of amendments that provide a formula on the face of the bill for a fixed rent cap and which, if approved, would render amendments 147 and 412 obsolete. I consider that setting out the rent cap in primary legislation is needed to offer more clarity to tenants and landlords, and to those who invest in and develop rented homes. For those reasons, I cannot support the members’ amendments, and I urge them not to move amendments 147 and 412.

Amendments 207 and 215, in the name of Rachael Hamilton, seek to make changes to the definition of the term “rent payable”, specifically to exclude utilities. Amendment 207 would make that change for the purposes of the application of the rent cap, which could allow landlords in a rent control area to increase charges for utilities without any regulation. The amendment of the rent cap to a fixed formula would impact on the amendment itself, making it redundant.

Amendment 215 would make the change for the purpose of the provisions in the bill that regulate rent increases in rent control areas, but that would conflict with the existing definition of rent in the Private Housing (Tenancies) (Scotland) Act 2016. That would lead to different definitions of rent, depending on whether a property was or was not in a rent control area, and therefore would cause confusion.

I acknowledge the concerns that have been raised by landlords, particularly in rural areas, about the potential impacts of rent controls where tenants pay the landlord directly for certain utilities or services. As has been set out, the bill already includes regulation-making powers that allow for circumstances in which landlords could raise rent above the cap. Our current consultation on the use of those powers acknowledges that rural landlords might face higher utility costs and asks for views on how such costs could be treated. Again, I am happy to engage with Rachael Hamilton and other members following the outcome of the consultation; I hope that that will reassure her, and I urge her not to move her amendments.

The amendments in Paul McLennan’s name in this group—that is, amendments 281 to 301, 327, 332 to 353, 393, 398, 401, 402 and 406—deliver on our commitment to provide clarity on how rent control will be implemented by setting out how rents will be capped in areas where the provisions apply. I am clear that it must be done in a balanced way that recognises the interests of landlords and tenants, and in a way that continues to support investment in private rented housing. That will ensure that the system of rent control that is introduced continues to support the supply of rented housing, in recognition of the fact that the rented sector is a critical part of Scotland’s overall housing system. The amendments have been lodged in direct response to calls for more clarity on the impact of areas designated for rent control.

Amendments 289A, 290A and 293A, in the name of Maggie Chapman, would enable a rent control area to be increased in size via regulations that vary the original designation. I consider that, where the rent control area is to be increased in size, that should be considered as creating a new rent control area and should be subject to the full process for designating such an area. For that reason, I cannot support the amendments.

Amendments 332A to 332H, also in the name of Maggie Chapman, seek to amend amendment 332 in Paul McLennan’s name. Amendment 332A would amend the permitted rate to be the lower of CPI inflation plus 1 percentage point, or annual percentage changes or expected changes in income. Amendment 332B provides that an alternative lower percentage could be set by the Scottish ministers in specified circumstances under new powers confirmed by amendment 332H, while amendment 332F provides a definition of the term “specified circumstances”. Amendment 410 provides for the new power inserted by amendment 332A to be subject to the affirmative procedure. Amendment 332C sets out the definition of the terms used in amendment 332A, while amendments 332D and 332E seek to amend the definition of “the latest index” in amendment 332 so that it covers the latest index “or figure” published before the tenancy starts or the rent increase notice is served.

For the reasons that the Minister for Housing has already set out in the Government’s response to the committee’s stage 1 report, we recognise that there are benefits in ensuring that increases in rent control areas are linked to increases in household incomes. However, wages are only one component of household income, which might also be affected by hours worked or by other sources of income, such as self-employment, benefits and assets. In addition, average wage inflation might not reflect the differing trends that are experienced specifically by tenants across the workforce. The costs to landlords of offering a property for rent are also a crucial consideration, and measures of wage growth are unlikely to fully reflect them.

It is also vital that the rent cap can be clearly communicated. The CPI is a well-known metric, and adding in various measures of wage growth would complicate the rent cap formula without their being directly connected to changes in household incomes. I therefore consider the consumer prices index to be the most appropriate basis for the rent cap.