Hansard

There are several amendments in the group, and I will address each in turn. I will start with amendment 15, in the name of Graham Simpson. I thank Mr Simpson for his helpful scrutiny of the bill. I accept the point that he makes in amendment 15 and I support its aim, which is to provide clarity. However, as I have said to him, the drafting of the amendment needs to be considered further, so I ask him not to press amendment 15. I will work with him to ensure that an amendment can be made at stage 3 that will achieve his aim. I will cover amendments 16 and 22 together, as they seek to do the same thing. We want to ensure that tenants who are facing financial difficulties that lead to rent arrears are supported to access all the help, support and advice that are available. Support for housing costs is the responsibility of the United Kingdom Government, through reserved benefits such as universal credit, which includes housing. We have actively encouraged tenants to apply for the financial support for which they are eligible, including through a specific campaign letting tenants know about their rights and the changes that we made to support them through the first emergency act. I remind members that the Scottish Government took action under the first emergency act to protect tenants from any eviction action for six months. In addition, we have provided Citizens Advice Scotland with £3 million to provide support to people struggling financially at this time. That includes an additional £100,000 for a new national helpline. Although we have welcomed the UK Government’s changes to the welfare system, equally, we have urged it on several occasions—prior to and during the coronavirus crisis—to go further and use its social security powers to make additional improvements to support those accessing benefits, including tenants who are struggling to pay rent. The Scottish Government budgeted £71.2 million in this financial year for discretionary housing payments for tenants to ensure that we mitigate the bedroom tax in full and to help those struggling with their housing costs. The committee should note that that is an increase of nearly £10 million on the previous financial year. We expect the cost to increase significantly over and above that amount due to the additional numbers of people moving to universal credit who will be hit by the bedroom tax. All of that will need to be paid for out of Scottish Government funds. I make it clear that no landlord should evict a tenant because they have suffered financial hardship due to the coronavirus pandemic. We expect landlords to be flexible with tenants facing financial hardship and to signpost them to the sources of financial support that are available. A landlord who is facing financial difficulty due to a tenant being in arrears is able to access a loan from the Scottish Government where they have discussed rent issues with their tenant and made an agreement on managing arrears. For many landlords, there is a genuine prospect of rent being unpaid. If they face a delay in payment, the loan will provide them with short-term financial support that they need for the longer term. Of course, the loan must be repaid. That support is vital, given that it will do no good to tenants and the private rented sector in general if a landlord has to sell a home or has it repossessed because they cannot meet their final obligations on the property during the coronavirus emergency. I urge the committee to reject amendments 16 and 22. Amendment 17 does not take into account tenants’ or landlords’ individual circumstances, including their financial circumstances. It does not consider the negative impact of its effects, including on the ability of landlords to adequately service their properties, or the potential severe financial impact on registered social landlords, who are already concerned about the loss of income as a result of the coronavirus emergency. Therefore, it is no wonder that stakeholders such as the Scottish Federation of Housing Associations, Association of Local Authority Chief Housing Officers and the Glasgow and West of Scotland Forum of Housing Associations are united in their opposition to this amendment. They have expressed their deep concerns to the committee. Legislation is already in place that provides stability to tenants in the private rented sector, and rents can be increased only once a year and with three months’ notice. If a tenant is waiting for financial support, such as benefits, action cannot be taken. In addition, tenants have the right to challenge unfair rent increases. In the social sector, the current legislation ensures that landlords have a legal duty to consult tenants about rent setting. They must also take into account the importance of what current and prospective tenants, and other customers, are likely to be able to afford when they are setting rents. Amendment 17 also pays no regard to the impact that it might have on the housing supply across the private and the social sectors. The committee should reject it. 09:30 In relation to amendment 18, as I said earlier, we have encouraged tenants to still pay their rent, if they can, during the course of the pandemic, to apply for all forms of financial assistance for which they are eligible and to seek advice and support. Although the emergency legislation will expire on 30 September, it can be extended for a further six months, and then a further six months after that, through affirmative regulations. We have made it clear that the Government will be flexible to meet the needs of people as we assess the economic and social impact of the pandemic. Amendment 18 takes a blanket approach to rent arrears that are accrued during the period for which the bill is in force. It does not consider the potential impact on landlords or the potential knock-on effect for housing stock that would occur should funds not be available to carry out the servicing of properties or, indeed, to make payments on the security of properties. We want to ensure that tenants can stay in their homes. Amendment 18 is a very blunt instrument, and I urge the committee to reject it. The arguments against amendment 19 are much the same as those against amendment 18. As I said, we have made it clear throughout the crisis that no landlord should evict a tenant because they have suffered financial hardship as a result of Covid-19. We have asked landlords to signpost tenants to the range of support and advice that is available to help tenants to pay their rent. As I said of amendment 18, amendment 19 takes a blanket approach to rent arrears. I also believe that it would not be right to include in the bill provisions that would, in effect, direct the First-tier Tribunal—an independent judicial body—to disregard particular evidence on why rent arrears occurred in a particular case. I recognise the need to manage the effective transition from the temporary provisions in the coronavirus legislation to the provisions in the pre-Covid-19 legislation. That is why I am actively pursing making the rent arrears eviction grounds discretionary in nature, which will enable a tribunal to examine all the reasons for the accumulation of rent arrears as a result of the Covid-19 pandemic. For those reasons, I encourage the committee to reject amendment 19. I turn to amendment 20. We have acted to protect tenants from eviction action during the emergency period. In addition, we have given the First-tier Tribunal discretion in considering whether it is reasonable to grant an eviction order. It can take the full circumstances of the case into account, including whether the landlord has been a recipient of our landlord loan fund. Of course, landlords will not profit from such loans—they must be paid back—and it does not benefit the tenant if a landlord’s property is at risk because the landlord cannot service the debts or the mortgage on a property. Amendment 20 risks landlords being put off applying for the loan and, instead, seeking eviction at the earliest opportunity. To take a loan, landlords would need to be willing to accept the lack of transparency on the period during which the provision would impact on their ability to operate the rental property. However, I recognise the need to ensure that we do our utmost to protect tenants, so I will lodge an amendment at stage 3 for a new regulation that will make a power to create private landlord pre-action protocols similar to those that are currently in place in the social sector. It will place on landlords a duty to undertake certain actions to support their tenant prior to being able to go to a tribunal to seek an eviction order. That approach will support tenants far more effectively. For those reasons, I encourage the committee to reject amendment 20. I turn to the amendments on council tax. It is in no one’s interest if housing stock sits idle and unused, which is why the Government has taken concerted action to get empty homes back into use. However, we must ensure that any action that we take in the midst of this crisis does not have unintended consequences. We oppose any relaxation of the rules on private rented tenancies to enable eviction to take place on the ground that the landlord wishes to return a property to the short-term rental market. That could lead to mass evictions when social distancing restrictions are lifted, and it would undermine our policy of providing tenants in the private rented sector with security of tenure. There are no unreasonable legislative barriers that would prevent the owner of a short-term let from moving into the private rented sector; indeed, there is evidence to suggest that a number of owners have already made that switch. We therefore do not believe that any change to legislation in this area is necessary. A fundamental principle of our private rented sector policy is to provide tenants with security and stability. Once a property is let under a private rented sector tenancy, it becomes the tenant’s home. We will not dilute those rights by making special provision for short-term let owners to move in and out of the private rented sector market. I therefore urge Graham Simpson not to press amendment 15 and, if he chooses to do so, I urge the committee to reject it. Amendment 46 would exempt from the payment of council tax all dwellings that are “available for rent” and “not occupied”, but I do not believe that it is required. Dwellings that are empty and unfurnished already qualify for such an exemption for several months. In addition, the Government is strongly encouraging local authorities to use the powers that they already have to defer payment of council tax bills for which landlords are liable now. That would remove the immediate pressure on landlords and would mean that the tax could be paid once their income has increased. Furthermore, there is financial support available to help landlords, whether their property portfolios are small or large. There are a number of flaws in the wording of amendment 46. One such flaw concerns the term “available for rent”, which could apply to types of properties beyond what I think Graham Simpson intends the amendment to cover. For example, the wording means that the amendment, if it is passed, could apply to self-catering lets, bed and breakfasts and other situations that do not involve private landlords. Another flaw is that the amendment sets no timescales in respect of lack of occupancy and gives no clarity on how long properties would need to be vacant before the proposed exemption from council tax would apply. As a result, the measures could apply to properties that have lain unoccupied for just one day or since last year. I therefore oppose amendment 46 both on policy grounds and because of legal issues with the drafting. This has been a long discussion on this group. It began with one of Mr Simpson’s amendments that we will return to at stage 3, when I hope we will agree on a way forward in co-operation. As I said, I support amendment 15 in principle, but there are some issues with its drafting. On amendment 47, the Council Tax (Exempt Dwellings) (Scotland) Order 1997 sets out dwellings that are exempted from paying council tax, including dwellings that are occupied by one or more students, a student’s spouse or dependant, school leavers or people under the age of 18. Under amendment 47, properties that would in usual times be covered by those exemptions but which are not covered due to being unoccupied for coronavirus-related reasons would be exempt. That would cease to have effect when the provisions of the eventual act end. Given that amendment 47 relates to properties that would be exempt from council tax in normal times and that the measure introduced by the amendment would last only as long as the bill itself is in force, the Government supports the principle of the amendment. However, there are areas where it needs to be refined. Therefore, if Mr Simpson does not press amendment 47, I will be happy to make a commitment that the Government will work with him to draw up an appropriate stage 3 amendment. I thank the committee for bearing with me through that lengthy discussion about this group of amendments.