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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, build-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.

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 appreciate where Maggie Chapman is coming from on the issue. I thank her for lodging the amendments to allow us to have the debate about how we can clearly set out what the rent cap is.

I go back to the points that I have already made about the importance of having something that takes other income into account, although I appreciate what Ms Chapman says about the likelihood of wages being the primary source of income for many renters. It is also important to have something that is understood by renters, landlords and investors. We need to be able to provide that insurance to all those interested parties. The clarity that the use of the CPI can provide is exceptionally important. I also believe that the CPI is the most appropriate method, for the reasons that I have set out.

I just wanted to make sure that I could get in before Meghan Gallacher finishes winding up.

I am unable to find in my weighty folder the specific date on which the consultation closes, but I think that it is in July—

In some ways, that depends on when stage 3 is. I have also heard very understandable calls from the sector for us to move through the bill process at pace. We are still in the early stages of stage 2, so you will forgive me if I do not try to estimate when we will complete the bill process. However, I am mindful of the need to look at how quickly we can get that done, and I give the reassurance that, regardless of how we are working with regard to stages 2 and 3, we will be working at the same time on the analysis, so that, as soon as the consultation closes, we will get the analysis done and the regulations drafted. Therefore, regardless of when the bill process is complete, we are working to get that done as soon as possible.

To return to my earlier point, taking account of the views of those with an interest to understand the impact of any measures is why our consultation has asked some specific questions about possible exemptions for mid-market rent and build-to-rent properties. We have also asked questions about landlords who charge rents below market rates and who make improvements to the property. There are also opportunities for landlords who do not see their circumstances reflected in the specific questions in the consultation to give their views and for tenants to give their opinions on how the proposals will impact them. To that end, amendment 302, in Paul McLennan’s name, sets out that the requirement in the bill on Scottish ministers to consult before laying regulations specifying properties that might be subject to a modified rent cap may be met by consultation carried out before the relevant section comes into force. That will support bringing forward any necessary regulations as soon as possible after the legislation comes into force, as I mentioned in my responses to the interventions.

Amendment 332, in Paul McLennan’s name, sets out the form of the rent cap. Providing a formula for the rent cap in the bill—the percentage change in the consumer prices index plus 1 percentage point, up to a maximum increase of 6 per cent—is an approach that will provide protection for tenants who are at the highest risk of the most significant rent increases. Setting a ceiling of 6 per cent can help to protect renters against large increases in rents at times when inflation spikes. Including a ceiling means that a greater share of the risk of future extreme economic events that cause a spike in inflation will lie with investors or landlords, who are arguably better placed than renters to cope with the impact that such events can have in the short term. However, the cap will also provide clarity for landlords and investors on rent increases in rent control areas.

CPI is a comprehensive measure of the trends in goods and services purchased by consumers in the United Kingdom economy. Costs relating to running a home are included in the index—for example, costs relating to maintaining a dwelling as well as the items within a dwelling. Linking the rent cap to CPI is, therefore, a reflection of the cost to landlords of offering a property for rent.

Allowing some margin over inflation, such as the 1 percentage point that we are proposing, will give investors some assurance that, over the long term, any periods in which growth is below inflation may be balanced out with periods in which rents may grow a little above inflation.

Through the housing investment task force, we have worked directly with investors and developers to understand how we can bring forward a system of rent control that both works for tenants and supports continued investment in private rented housing.

Thank you for your assistance, Mr Simpson. I am very keen to move expeditiously with the discussions in short order afterwards.

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.