Seòmar agus comataidhean

Amendments 29 to 31, along with amendments 34 to 46, in the name of Willie Rennie, would collectively remove the restrictions on rent increases between tenancies and the means by which a tenant could enforce those restrictions.

The overarching purpose of the rent control measures is to protect the social and economic interests of tenants by stabilising rents in areas where market rents have been increasing particularly steeply. Allowing unrestricted rent increases between tenancies would undermine that purpose and would reduce the protection that rent controls can offer for tenants.

Allowing unrestricted rent increases between tenancies could also lead to a two-tier market, with a difference between tenants who move tenancies and those who stay in tenancies for longer periods of time. Tenants might remain in a tenancy for longer than they would otherwise have done, even when that tenancy does not meet their needs, because their existing rent is more affordable than open market rents for new tenancies in the same area. There is a risk that that could reduce people’s ability to access suitable rented homes and could reduce the ability of tenants to move if their circumstances change. It could also make it harder for prospective tenants to obtain a lease for a rental property in a rent control area.

I understand Willie Rennie’s concerns and recognise that some landlords are concerned about restrictions between tenancies, particularly in circumstances in which the landlord has not increased the rent during a tenancy, has made significant improvements to the let property or is facing increased costs in offering the property for let. That is why the bill already includes provisions for ministers to make regulations allowing for properties to be excluded from rent control or for rents to be increased above the cap. I hope that the fact that our consultation on the potential use of those provisions has been published reassures Mr Rennie and landlords that we are considering the most appropriate way to approach the issues. However, removing the restrictions on pre-tenancy rent increases is not an approach that I can support.

Mr Rennie’s amendments 32 and 33 would change the terms under which a property that is let under a tenancy is to be considered the same as a property that was let under a previous tenancy. Those amendments would provide that the question of whether a property is the same must include consideration of the extent to which the property has been decorated or renovated since the end of the previous tenancy. That could allow a landlord to raise the rent between tenancies without restriction if they have undertaken very minor redecoration or renovation to the property between tenancies, which would not be in keeping with the aim of rent control.

As I have said, the bill already includes provisions for ministers to set out circumstances in which rents may be increased above the cap. An area that is being consulted on is the use of those powers when a landlord has made significant improvements to the let property, either during an existing tenancy or between tenants.

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 and important 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 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.

I will try to go through the main points that have been raised. I thank all members for the discussion, particularly on the Government amendments.

I will deal with the aspects that Meghan Gallacher raised about concerns over the removal of consultation. If the rent cap is included in the bill, as we intend it to be, there will be no need to consult on it, because it will have already been included in the bill.

Amendment 327 is technical.

Turning to issues raised by Katy Clark and others, I absolutely appreciate that there is a need to tackle the disrepair that exists in the private rented sector. As members will know, we will come on to discuss other groups of amendments that also deal with the issue of disrepair and the general standard of the private rented sector, where that is poor. I think that there are other ways of dealing with the challenge that Katy Clark has rightly put forward, and I am happy to continue to discuss the overall issue with her—and, indeed, with the other members who have raised it with me both today and previously—both in the run-up to stage 3 and in relation to the other groups that we will come on to.

Much of what Rachael Hamilton has discussed today is referred to in the current live consultation, so I very much recognise where she is coming from. The Minister for Housing has also agreed to engage with Scottish Land & Estates over the summer on the same aspects, so I am taking the issue that she has raised very seriously.

On the substantive issues that Maggie Chapman has raised about the rent cap formula, although I think that she and I are in exactly the same place in wanting to protect the most vulnerable tenants, this is one of those areas where I fundamentally disagree with her. I believe that we cannot protect the most vulnerable by creating a system that puts off investment and therefore the delivery of more homes—there is a balance to be struck between what we do to protect tenants and ensuring that we encourage investment and the building of more homes.

I hope that I can reassure her that repairing standard compliance would not be included in those circumstances in which rent could be increased above the cap, as set out in the consultation. Others might have different views on that, and I appreciate that the consultation is on-going, but, as I am sure will come through in that consultation, there is a discussion to be had about landlords making improvements to meet the sector’s minimum standards and those who might be investing heavily in modernisation or different types of work. As I have said, I am sure that those nuances will come through in the consultation.

As for having discussions on the formula that has been set out, I am happy to get back to and discuss the matter with Maggie Chapman before stage 3. However, according to the material that I have today and which I can highlight in these closing remarks, although CPI and wage growth can fluctuate relative to each other over time, the post-war experience has been that wages tend to grow faster than inflation in the long run. The 6 per cent cap also protects against situations, such as the recent cost of living crisis, in which a spike in inflation causes real wages to fall sharply. I go back to my point that the area needs to be clearly understood. I think that, at this point in time, this will just have to be one of those areas on which Ms Chapman and I will continue to disagree.

Amendments 148, 149, 158 to 160 and 185 in the name of Maggie Chapman would collectively enable the Scottish ministers to designate the whole of Scotland as a national rent control area in certain circumstances.

Introducing rent controls interferes with the property rights of landlords and any interference must be proportionate. A national rent cap might be difficult to justify due to the varying social and economic circumstances across the country. The way that the amendments are drafted means that the safeguards for normal rent control areas would not apply. Without those safeguards, it might not be possible to impose a national rent cap that is proportionate.

The measures in the bill will create the framework to deliver a nationally consistent approach to the consideration of the need for rent control, while maintaining the link to local circumstances. That is an appropriate, robust way to deliver rent control in Scotland. Although I acknowledge that there could be circumstances in which the Scottish ministers might wish to consider wider temporary rent control measures, their powers under Maggie Chapman’s proposed amendments would be far too broad.

Our vision for a long-term system of rent controls that delivers a nationally consistent approach with flexibility for local circumstances is key. Should action on rents be required where there has been significant change in rent levels or in the rate of rent increases in the period between the five-yearly cycle of local authority assessments, there are already powers in the bill for local authorities to carry out an additional interim assessment of rent conditions in their area or for the Scottish ministers to direct a local authority to undertake such an assessment.

Were such extreme circumstances to arise in the future to necessitate a blanket national rent cap that would apply regardless of local circumstances, that would be a significant intervention, and it would not be appropriate for that to happen only through regulations. Such action should be subject to the full parliamentary scrutiny that is afforded to primary legislation, as was the case with the emergency legislation that was introduced by the Government in response to the Covid-19 pandemic.

I therefore cannot support amendments 148, 149, 158 to 160 and 185. I urge Maggie Chapman not to press amendment 148 and not to move those other amendments.

Amendments 186, 196 and 199, in the name of Maggie Chapman, would, essentially, reintroduce the temporary modifications to rent adjudication that were set out in the Rent Adjudication (Temporary Modifications) (Scotland) Regulations 2024, which expired at the end of March.

Although I recognise the good intent behind the amendments, and the desire to protect tenants from unreasonable in-tenancy rent increases, I cannot support them.

The temporary modifications were developed specifically to support the transition away from the emergency rent cap, which was introduced under the Cost of Living (Tenant Protection) (Scotland) Act 2022. Those temporary changes were part of that transition and were aimed at preventing a return to market rents in a single step where a tenant sought a review. They were not designed—indeed, they would not have been able—to operate until rent control becomes operational.

Amendment 319 seeks to amend section 15 of the bill to provide definitions of the terms that are used in the amendments that I have described, and amendments 320 and 321 are consequential amendments, which seek to reflect the new arrangements for information requests that are made by the Scottish ministers.

Amendment 322 will provide the Scottish ministers with a power to modify section 15 to change the information that might be sought by a local authority or the Scottish ministers. That will provide flexibility to adapt the data that is collected to suit changing circumstances, should existing information no longer be necessary or should new information be required. Amendment 394 will subject those regulations to the affirmative procedure.

Amendment 323 seeks to allow for information sharing between local authorities and the Scottish ministers and between individual local authorities, and it clarifies the purpose for which information can be shared and seeks to minimise the number of requests that are made of landlords.

Amendments 324 and 325 seek to remove and replace sections 16 and 17, which currently provide enforcement mechanisms for a local authority when a landlord fails to comply with a request for information or knowingly provides false information in response to a request. The replacement sections that amendments 324 and 325 provide take account of the new powers to request information that are being conferred on the Scottish ministers.

Amendment 326 will provide the Scottish ministers with a power to request information that is held in a local authority’s landlord register to enable them to carry out their functions and to assist local authorities in carrying out their functions under part 1 of the bill. Contact information for landlords and letting agents will allow the Scottish ministers to collect the data that they will be allowed to collect under the amendments that the Government has lodged.

Amendment 328 will enable the Scottish ministers to use the data that is collected to conduct research, to publish statistics or to encourage others to do those things, and it will enable the processing of the information that is received from landlords so that anonymised statistics can be published. I hope that that will reassure Meghan Gallacher, Edward Mountain and Carol Mochan in respect of their amendments in relation to making data publicly available.

The collection of information from landlords is critical to the implementation of rent control. The Government’s amendments will strengthen the ability to collect the relevant information from landlords, thereby assisting local authorities in undertaking their assessments of conditions in relation to rent and in reaching a recommendation on whether rent control is appropriate.

On the other amendments in the group, amendments 3 to 6 and 8, in the name of Emma Roddick, would, alongside her consequential amendments 7 and 9 to 20, make it a duty for all landlords—of whom there are almost a quarter of a million—to provide all the information that is listed in section 15(2) of the bill

“within 28 days of being entered into the local authority’s landlord register,”

and

“thereafter at such frequency as the local authority may determine”.

The amendments would allow any local authority to request any further information and would remove the purpose for which such information can be requested, and they would place a significant administrative burden on local authorities and landlords to collect and provide data. They would also remove the discretion of local authorities to seek the data that they deem necessary in the context of the local circumstances in their area.

I thank Emma Roddick for that intervention and for all her work in this area. As I have just said to Alexander Stewart, I am keen to ensure that we strike the correct balance, and I am keen, too, for local authorities to have the powers to collect the necessary data to ensure that the legislation works effectively.

I take Emma Roddick’s point and acknowledge that she still has concerns about gaps and about the system not being robust enough. Indeed, that is exactly why I made the invitation that I made at the start of my opening remarks—I want to ensure that, regardless of where we end up with this discussion and with the amendments that will be voted on today and later this week, if concerns remain, we can have discussions about ensuring that we have robust data and a system that works effectively. I take the member’s point and, as I have said, I recognise that she remains concerned about the issue. We can certainly pick the issue up in discussions with local authorities over the summer.

Moving on, I thank Emma Roddick for lodging her amendments, and I appreciate the concerns on which she has based them. However, I have my own concerns about the proportionality of her amendments and about the resource burden that having to collect information from landlords on an on-going basis would place on local authorities. Therefore, I cannot support the amendments, but I hope that I can discuss the issues and work with her—and, indeed, local authority colleagues—on them over the summer.

Amendment 109, in the name of Meghan Gallacher, would require the Scottish ministers to publish information that is collected under section 15. I recognise the usefulness of making data available—indeed, amendment 328 has been lodged to support the publication of information—but I do not consider it necessary or cost effective to publish each individual piece of information that is collected, so I cannot support Meghan Gallacher’s amendment. I come back to the principle of ensuring that we are not creating an overly complex or bureaucratic system that does not deliver value for money.

Meghan Gallacher has made a useful point about what can and should be in the public domain. It is important that we open up the information and data that are collected—indeed, that is why the Government has lodged the amendments—and I look forward to her taking part in the discussions over the summer to ensure that we test the system. It is important that we are able to test it before stage 3 to ensure that members who still remain concerned about, say, the system not collecting enough information or it collecting too much information and being overly cumbersome can come and have that discussion with me. They will then be able to come back with amendments at stage 3, should they so wish.

Amendment 137, in the name of Emma Roddick, and amendment 237, in the name of Maggie Chapman, would increase the potential financial penalty on landlords for failure to comply with requests for information from £1,000 to £10,000. However, I note that my amendments 324 and 325 seek to remove and replace sections 16 and 17, as a result of information-gathering powers being conferred on the Scottish ministers by amendments in the group. Similarly, Maggie Chapman’s amendments 324A and 325A seek to increase the relevant penalty to £10,000. Unfortunately, I cannot support the amendments, as I consider that they set a penalty that is too high in the context of a landlord’s conduct. I still believe that £1,000 represents a more proportionate penalty.

On that basis, I ask Emma Roddick and Maggie Chapman not to move their amendments and to work with me ahead of stage 3 if they still have concerns on the issue. From the work that the Government has done on the matter, I remain convinced that the penalty is at the right level.

Amendments 153 to 155, in the name of Edward Mountain, seek to make changes to the type of information that can be sought from landlords. I understand the purpose of the amendments, but I consider that amendments 305 to 313, in Paul McLennan’s name, provide a more comprehensive expansion of the list of information that can be requested from a landlord. The list that is proposed in amendments 305 to 313 is more consistent with the information that is collected by rent service Scotland to support decisions on rent adjudication. Amendments 305 to 313 are therefore more appropriate in the context of the information that is needed to support rent control, as they will deliver information that is more closely comparable with the data on advertised rents that rent service Scotland collects.

Amendments 156 and 157, in the name of Edward Mountain, would mean that the information that is requested by local authorities would be added to the landlord register. The primary purpose of landlord registration is to give councils a means to assess whether an individual is a fit and proper person to let property. I do not believe that adding that information to the landlord register would assist local authorities in making that assessment. The amendments could result in inconsistent information being held on different landlords, depending on whether a landlord has received a request for information. The amendments would also require further consequential amendments to the Antisocial Behaviour etc (Scotland) Act 2004.

Although I acknowledge the intent behind the amendments and recognise that there could be benefits to using the landlord register as part of the data collection process, it is important to emphasise that the proposed changes would place significant additional burdens on landlords and on local authorities as operators of the landlord register. I do not consider that they are necessary in connection with rent control, and I believe that they could inadvertently make a fundamental change to the purpose of the landlord register without due consideration of the impact on its core purpose, which is ensuring that someone is a fit and proper person to be a landlord. Therefore, I cannot support the amendments.

Amendment 448, in the name of Maggie Chapman, would amend the bill to change the discretion of a local authority to a duty, which would mean that every local authority in Scotland would need to write to every landlord on the register to request all the information that is set out in section 15(2) of the bill. As I have previously set out, although I understand and support the strong desire for robust information about tenancies, I cannot support the amendment. It would remove the discretion of local authorities to seek the data that they deem to be necessary, and it would be costly and disproportionate to the level of data that is needed to inform rent control assessments.

Amendments 449 and 450, in the name of Maggie Chapman, would provide for data to be obtained from landlords for the purpose of being provided to the rent officer or the First-tier Tribunal to assist them in determining open market rent. It is not clear that that information is needed by rent officers or the First-tier Tribunal, as they already make determinations of open market rent without access to that information. It is also uncertain how such a process is intended to operate or how often information would be needed for that purpose. That would place an additional burden on local authorities, with potentially significant costs and no clear benefit, and I am unable to support the amendments.

Amendment 481, in the name of Carol Mochan, would require local authorities to provide the tenant with a copy of the information that they have obtained from a landlord. Although I recognise the intention behind the amendment, it would add a significant additional administrative burden and cost in relation to the collection of data. The concern is about the accuracy of the information that is provided by the landlord, but there are already powers in the bill for local authorities to request information from tenants. I therefore cannot support the amendment, as I do not believe that it is needed.

Amendment 482, also in the name of Carol Mochan, would remove the ability of the Scottish ministers to remove information from the list of information that can be requested from a landlord. That would remove the flexibility that the power was intended to create, and it would mean that primary legislation would be required to remove from that list any information that is no longer considered relevant. Regulations under section 15(7) are subject to the affirmative procedure, so there would be parliamentary scrutiny of any attempt to reduce the information that can be requested. I therefore cannot support amendment 482.

Finally, Carol Mochan’s amendments 483 to 486 would amend sections 16 and 17 of the bill to remove elements of discretion from the enforcement procedures behind the duties on landlords to provide information. Those amendments would remove an element of discretion from local authorities and, in certain cases, would create strict liability for a financial penalty, even when the First-tier Tribunal considered such a penalty to be inappropriate. I therefore cannot support those amendments.

Sections 15, 16 and 17 of the bill were drafted with the intention of ensuring that the powers for local authorities and the Scottish ministers support the collection of data on a proportionate basis and do not unnecessarily burden local authorities, landlords and tenants. My amendments in the group seek to enhance those powers while respecting the rights of landlords.

I understand the intent behind the amendments in the group, but I cannot support them, for the reasons that I have set out. I therefore urge Emma Roddick, Maggie Chapman, Edward Mountain, Carol Mochan and Meghan Gallacher not to move their amendments in the group and to work with me ahead of stage 3. If any of their amendments are moved, I ask members to oppose them and, instead, to support the amendments that have been lodged in the name of Paul McLennan.

I move amendment 303.

This group of amendments relates to the provisions in the bill that create a power for Scottish ministers to exempt certain properties from rent control by regulations. Although I cannot support the amendments in the group that have been lodged by other members, I agree with the importance of ensuring that full consideration is given to the circumstances in which it might be appropriate to make exemptions. That is why we published a consultation on the use of the powers to ensure that the impact on landlords and tenants of any exemption that might be provided for in regulations is fully understood.

I repeat what I said earlier: I am completely convinced of the need to use powers in the bill to exempt, where appropriate, certain categories of property from rent control and to allow rent increases that are above the level of the proposed rent cap in certain circumstances. Members have already raised many compelling arguments for that. However, that must be supported by consultation that ensures that the impact of such measures is fully understood and that our actions do not create any unintended consequences, taking into account the views of everyone who has an interest.

With reference to amendments in the group, our consultation asks specific questions about possible exemptions for mid-market rent and build-to-rent properties. Alongside that, there are opportunities for landlords who do not see their circumstances reflected in the specific questions to give us their views, and for tenants to give us their opinions on how the proposals will impact on them. We will consider all those points as they are proposed in the consultation.

I turn to amendments 329, 330 and 331 in the name of Paul McLennan. Amendments 329 and 331 will have the effect of moving the power to define an exempt property in section 13 of the bill so that it appears in other legislation alongside the rent controls to which it relates. That flows from previously debated amendments that would replace the power to set a rent cap in section 9 of the bill with the provision for a rent cap in the other legislation. The relocation of the power would make obsolete the existing power to define what is an exempt property in section 13. Therefore, I support Meghan Gallacher’s amendment 107, which was debated earlier, because it would remove the resulting obsolete section of the bill.

Amendment 330 will make a technical correction to the bill to change part of the title for the new part 4A of the 2016 act from “excluded” to “exempt”.

I turn to other amendments in the group. Meghan Gallacher’s amendment 102, Edward Mountain’s amendment 150 and Willie Rennie’s amendment 329A would create a duty for Scottish ministers to define an exempt property by affirmative regulations. However, those regulations cannot be made without the approval of the Scottish Parliament, meaning that compliance with the duty would not be entirely in the gift of Scottish ministers. I agree that it is essential that exemptions are provided for, but imposing that as a duty on Scottish ministers is not the right way to progress that. Accordingly, I urge members not to press or move amendments 102, 150 and 329A but, if they do so, I urge members of the committee not to support the amendments.

I turn to Meghan Gallacher’s amendments 103, 105 and 106, Rachael Hamilton’s amendments 208 to 212 and 566, Mark Griffin’s amendments 411 and 416 and Willie Rennie’s amendments 329B to 329D and 329G to 329I. Collectively, the amendments set out potential exemptions from rent control in the bill, covering properties that are let by subsidiaries of landlords, including those delivering mid-market rental properties, built-to-rent properties, properties that are subject to improvements, including energy efficiency, and properties that have been offered for rent at below-market rates. Although I absolutely understand the reasons behind the amendments, I do not think that such properties should be included as exemptions in the bill. The reason for that approach is that exemptions must be fully informed by consultation with stakeholders so that they are framed in a way that ensures that they disapply rent control in the appropriate circumstances and do not capture circumstances in which rent control should apply.

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 per cent 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 are 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 can 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.

Good morning. The amendments in this group relate to the amount by which landlords can increase rent, where a rent control area is in force, and include Government amendments in the name of Paul McLennan to set out the form of the rent cap in the bill. The amendments also touch on concerns about the impact of rent controls on the circumstances of individual landlords and where it might be appropriate to allow additional increases above the level of the cap. I recognise those concerns, and I continue to engage with landlord representative organisations and others in the sector.

Section 14 of the bill includes a power for Scottish ministers to make regulations that allow for rents to be increased above the level of the rent cap in specified cases. The aim is to ensure that, where appropriate, the individual circumstances of landlords who might be disproportionately impacted by rent control can be taken into account. I fully agree on the importance of providing clarity to the sector as soon as possible about how that will be accomplished, and I recognise that some stakeholders would prefer that that detail was set out in primary legislation. However, it is essential that decisions on that are informed by consultation, to ensure that the potential impact of the use of that power is fully understood and that measures are developed in a way that is fair, robust against challenge and can be clearly set out in legislation.

I have listened to the calls for clarity from tenants, landlords and investors about the implementation of rent control, which is why the Scottish Government has recently published a consultation to support the consideration of how the regulation-making powers could be used. That will ensure that the impact of any decisions on the use of those powers is fully understood and that any measures are framed in a way that is clear and proportionate. Bringing forward the consultation to a point before the time when it might have been anticipated—for example after the bill had completed its passage through the Parliament—will allow us to provide the clarity that is being sought as soon as possible and will support us to bring forward any secondary legislation at the earliest opportunity following royal assent.

I want to make it clear that I am completely convinced of the need to use powers in the bill to exempt, where appropriate, certain categories of property from rent control and to allow rent increases above the level of the cap in certain circumstances. That is important to ensure that we continue to encourage investment in Scotland and in housing. However, that must be supported by consultation that ensures that the impact of any such measures is fully understood and that our actions do not create any unintended consequences, taking into account the views of everyone with an interest.